Natural gas prices in West Texas under pressure from a glut in supply sank even further into negative territory after a segment of a pipeline system was shut following a fire, threatening to trap gas in the region.
Intraday cash prices at the Waha hub in the Permian Basin fell to around -$3 per million British thermal units from around -50 cents earlier in the day, according to traders. This comes after Kinder Morgan Inc. shut a part of its Natural Gas Pipeline of America system due to a natural gas release and fire.
Prices in West Texas have been negative as low demand for the heating fuel has combined with strong production. That means producers are paying someone to take gas off their hands.
US natural gas futures that have been hovering near the lowest in four years neared a 29-year low Friday. Already dismal prices are being pushed down further by a lull in weather before summer cooling needs kick in.