Texas natural-gas prices turn negative despite soaring heatwave temperatures
Traders told Reuters that the negative prices are due to planned pipeline maintenance from Kinder Morgan.
AP Photo/Matt York
- Natural-gas prices in Texas have dropped into negative territory.
- This isn't common when energy demand is high during summer heatwaves.
- But pipeline maintenance in the state boosted supply, creating a price slump.
Natural-gas prices in Texas have slipped into negative territory even amid a heat advisory for parts of the state, Reuters reported.
Though this will sometimes occur, negative next-day gas prices are more typically seen in cooler seasons, when there's less demand for air conditioning — not when temperatures are climbing into the triple digits.
Still, prices at Texas' Waha hub dropped to negative $1 per million British thermal unit on Monday.
It's a situation where high demand has likely been offset by an oversupply of the energy commodity, and it's been attribution to pipeline maintenance by Kinder Morgan, an energy firm working to limit gas capacity in the Permian Highway gas pipe.
Taking this infrastructure offline can lead to trapped natural gas, momentarily boosting supply. According to traders that spoke with Reuters, other reasons may have contributed to the negative price slide as well.
This is the 18th time this year that Texas natural gas price have entered negative territory, the outlet said. According to Fortune, some of this price action was similarly caused by pipe shutdowns, such as when the Natural Gas Pipeline of America was taken offline due to fire in April.
For Texas' energy consumers, however, this likely won't lead to cheaper electricity bills. Already, past heat waves have caused the states' spot electricity prices to soar as high as 20,000%.
What's more, West South Central states — including Texas — are likely to have the most expensive bills of the country this year, the Energy Information Administration reported.