Permian Basin benchmark Waha cash prices are in a prolonged slump due to limited natural gas offtake capacity and oversupply and are unlikely to see any relief this summer. But a massive new pipeline is scheduled to come online this fall, releasing a wealth of associated gas and easing price pressures.
Whaa exchanged negative territory during most of the spring and in the summer, with producers forced to pay to remove excess supply, which is often stored underground. The hub averaged 69.0 cents/MMBtu on Tuesday, down 2.0 cents from the previous day, according to NGI data.
The supply of the Permian is determined by Associated gas alongside oil. Crude oil production in the prolific basin reached record levels this year as global demand was strong and activity by Saudi-led OPEC and allied oil-rich countries slowed. Total U.S. crude oil production reached an all-time high over 13 million b/d multipleaccording to the latest data from the US Energy Information Administration (EIA). Almost half of this supply came from the Permian. This was also the case in August.
