Sellers needed to pay buyers on Tuesday to take natural gas at the Waha hub in west Texas as late cooling demand tapered, even with flows ramping up in the past week on the 2.5 Bcf/d (71mn m³/d) Matterhorn Express pipeline.
The Waha index on Tuesday fell to -76¢/mmBtu, the lowest in nearly four weeks. Waha prices in the previous week averaged $1.216/mmBtu, with the index hitting an eight-month high of $1.735/mmBtu on 3 October. The index was last negative on 13 September.
Flows on the Matterhorn Express have averaged about 600mn cf/d so far this month, analysts with Gelber & Associates said on Tuesday. Those flows moved into the Transcontinental pipeline and into Texas Eastern Transmission pipeline. Even with deliveries on Matterhorn expected to ramp up to full capacity before the end of 2024, robust levels of associated gas production out of the Permian remain a constant factor.
"Dry gas production reached a record high at 20.6 Bcf/d from the region on October 5, averaging at 20.4 Bcf/d in the past week and about 500 MMcf/d higher than September levels," the analysts said.
Spot prices have also lost what had been above-normal gas-fired power demand stemming from a late heat wave in the southwest. Heat advisories issued by the US National Weather Service for large swaths of the southwest mostly expired on Monday after being in effect since last week. Temperatures are expected to remain warmer than normal in the southwest as well as Texas over the next two weeks, according to private forecaster Maxar, though this far into the fall shoulder season those conditions will stunt overnight heating demand while doing little for daytime cooling needs.
Forward prices for Waha have come down this week, reflecting diminished concerns on supplies for winter demand. The November price for Waha was $1.726/mmBtu, down by 9.1pc from the start of this month, according to Argus forward curves data. The December price was $2.438/mmBtu, down by 5.1pc from the start of October.
