Permian supply concerns push SoCal winter gas prices toward record highs

摘要

SoCal Gas city-gate winter 2020-21 forwards prices are now at their highest since early May as stalling West Texas gas production and shifting regional fundamentals boost competition for Permian supply. On Aug. 14, calendar-month prices for December, January and February settled at $4.83, $4.62 and $4.30/MMBtu, respectively – nearly at par with record highs recorded in May. At an average $4.58/ MMBtu, peak winter-season prices at SoCal Gas are also trading nearly 50 cents above last winter's historical average, S&P Global Platts' most recently published pricing data shows. This spring, market concern over the fate of associated gas supply flowing west from the Permian Basin lifted the SoCal forward market sharply as West Texas crude prices tumbled to record lows. Despite a subsequent and precipitous decline in drilling activity there, SoCal prices eased by mid-summer as production from previously curtailed wells was brought back online, lifting associated gas output.