Usually when we write about natural gas markets in the Western third of the U.S., we spotlight the Permian Basin and its Waha gas hub. The focus on Waha has been for good reason, as the last three years have been nothing if not exciting in the Permian’s primary gas market. The basin’s huge volume of associated gas production and Waha’s volatility and deeply negative basis — even negative absolute prices — have made the West Texas market eminently watchable. Though a flurry of new pipelines out of the Permian have helped tame the market somewhat recently and driven Waha to the point of positive basis on its best days, the markets west of the Permian are a different story. They have seen very little in the way of new gas infrastructure, and the constrained inbound pipeline capacity has recently driven prices in the Desert Southwest to some incredible premiums. In today’s blog, we take a look at the gas markets there.
A Thousand Miles From Henry, Part 2 – Desert Southwest Natural Gas Basis Is Sizzling
