• 3 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 7 minutes Saudi and UAE pressure to get US support for Oil quotas is reportedly on..
  • 11 minutes China devalues currency to lower prices to address new tariffs. But doesn't help. Here is why. . . .
  • 15 minutes What is your current outlook as a day trader for WTI
  • 2 hours Maybe 8 to 10 "good" years left in oil industry * UAE model for Economic Deversification * Others spent oil billions on funding terrorism, wars, suppressing dissidents * Too late now
  • 19 hours Long Range Attack On Saudi Oil Field Ends War On Yemen
  • 6 hours In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 2 hours Will Uncle Sam Step Up and Cut Production
  • 6 hours 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 7 hours CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"
  • 13 mins With Global Warming Greenland is Prime Real Estate
  • 25 mins Sad . . . Only thing that moves oil price up is an attack on Tankers or Oil Facilities (Staged or real?)
  • 9 hours Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 1 day Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 11 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 1 day Continental Resource's Hamm wants shale to cut production. . . He can't compete with peers.
  • 2 days NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 1 day US Petroleum Demand Strongest Since 2007
Alt Text

U.S. Sanctions Backfire, Lead To Boost In Russian Oil Exports

U.S. sanctions against Venezuela and…

Alt Text

The Fastest Growing Energy Producer In The World

Production growth is a key…

Alt Text

Aramco IPO Could Spell Disaster For Big Oil

The Saudi Aramco IPO could…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Moody’s: Ultra Low Permian Gas Prices Weigh On Oil Company Earnings

The very low natural gas prices in the Permian are dragging down exploration and production (E&P) investment returns in the most prolific U.S. shale oil basin, Moody’s Investors Service said in a new report on Thursday.  

Pipeline constraints for the abundant oil and gas production in the Permian, coupled with gushing associated gas from oil drilling, keep natural gas prices in the region at very low levels. The midstream constraints for oil and gas transportation in West Texas and New Mexico have been limiting exploration and production volumes and weakening the realized oil and natural gas prices for producers, according to Moody’s.

“New natural gas pipelines will likely go into service in the second half of 2019 and 2020, alleviating the bottleneck, but natural gas prices in the Permian Basin will continue to suffer from high basis differentials as E&Ps pursue growth in oil production,” James Wilkins, a Moody’s VP-Senior Analyst, said.

Natural gas prices at the Waha hub in West Texas plummeted to record low negative levels last week, as pipeline constraints and problems at compressor stations at one pipeline stranded gas produced in the Permian.

Spot prices at the Waha hub plunged to a record low of minus $4.28 per million British thermal units (MMBtu) last week.

Real-time or next-day prices at the Waha hub have stayed at negative levels since March 22, so drillers have had to pay companies with capacity to ship the gas via pipeline.

Gas production in the Permian has been rising in lockstep with crude oil production, and even though gas takeaway capacity has attracted less media attention, pipeline constraints for natural gas are similar to those of crude oil pipeline capacity.

The natural gas takeaway capacity constraints have resulted in more gas flaring in the Permian on the one hand, and in a record-high spread between the Waha gas hub price and the U.S. benchmark Henry Hub in Louisiana, on the other hand.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play