U.S. natural gas futures eased to a two-week low on Monday amid record output, negative spot prices at the Waha Hub and forecasts for mild weather. Natural gas at the Waha hub–a regional pricing hub for gas in the Permian Basin in West Texas–sold for near-zero or sub-zero prices for much of 2024, a trend that has continued in the current year. Indeed, prices at the hub spent 164 days in negative territory and hit an all-time low -$7/mmbtu at the end of August, truly historical lows. The Permian Shale boom led to a surge in associated gas production, with output growing more quickly than takeaway capacity. Consequently, Permian gas infrastructure has become saturated in recent years, effectively meaning that producers sometimes have to pay for someone to take their gas so that they can continue to produce something more valuable: crude oil.
