Waha cash market rallies amid lower Permian gas production, record LNG export demand

摘要

Permian Basin spot gas prices have been surging back toward annual highs in recent trading as West Texas production stumbles and rising LNG export demand pulls more supply eastbound to the Gulf Coast. Over the past several trading days, the cash market at Waha is up about 70 cents/MMBtu. On Nov. 11, prices at the benchmark West Texas location were up another 3 cents to $2.52/MMBtu, preliminary settlement data from S&P Global Platts showed. In early October, a combination of short-lived factors pushed the market to a nearly 20-month high at $2.91/MMBtu. That move was followed by a sharp retracement in prices earlier this month. The current rally, though, could be more sustainable following recent and more enduring changes in regional supply-demand fundamentals. In fact, forwards markets are already betting on it. In November, the balance-of-month gas contract at Waha has traded at an average $2.39, most recently settling Nov. 10 at $2.47/MMBtu. At expiration in October, the balmo contract end trading at just $1.59/MMBtu – more than $1/MMBtu below the cash market at that time, S&P Global Platts M2MS data shows.