Natural gas prices fell into record negative territory in the Permian basin, dragged down by booming oil production and a limited ability to move gas out of the region. Unlike in other places, such as the Marcellus and Utica shales, natural gas in West Texas is produced as a byproduct. This “associated gas” is essentially an afterthought, a surplus and almost irrelevant product that comes out of the ground due to the relentless pursuit of crude oil. Precisely because the natural gas is not the target is exactly why more gas continues to be produced regardless of what prices do. This dynamic helps explain how natural gas prices at the Waha hub in West Texas can fall to -$3.38/MMBtu – yes, negative $3.38 – as they did on Wednesday, which means that producers are paying others to take their gas. Javier Blas of Bloomberg News tweeted that prices may […]