By Avi Salzman
As war-driven shortages drive the price of oil and natural gas to multiyear highs around the world, a curious thing is happening in Texas -- natural gas is trading at negative levels.
That means that producers are having to pay companies to take the natural gas they are producing off their hands.
This isn't the first time gas has gone negative in Texas. But the price is particularly depressed today, and it's coming at a time when most of the world desperately needs the commodity.
Natural gas priced at a major pipeline intersection in West Texas called Waha is trading for negative $7.05 per million British Thermal Units, according to the latest data from LSEG. That means that producers have to pay buyers that amount.
The price hit a record low of negative $9.52 on April 15, according to trade publication Natural Gas Intelligence. The natural gas price at Henry Hub, a pipeline intersection in Louisiana, is also depressed, though not nearly as much. It's trading at $2.52, an annual low.
The bottom line is that there is too much natural gas being produced in the U. S. -- and Texas in particular -- and not enough pipelines to transport it.
American producers are quickly growing production, but haven't yet built enough capacity to move it around the country -- or out of the country to areas like Asia and Europe that don't produce enough of their own natural gas. Some countries that historically have depended on the Middle East for their natural gas are facing severe shortages today.
The U.S. produces roughly 110 billion cubic feet of natural gas a day, and ships about 19 billion overseas in liquid form. "It's been a real success story, but you can't scale it that quickly," said Tim Rezvan, a KeyBanc Capital Markets analyst who follows oil and gas producers.
So even with a global gas crisis, U.S. producers have actually been cutting production. "We began tactically curtailing volumes this month," said Jeremy Knop, the CFO of producer EQT, on an earnings call this week. EQT, based in Pittsburgh, mostly produces gas in Appalachia and owns pipelines in the area too. EQT's multifaceted business may be one reason why the stock has outperformed some competitors this year. It's up 10%. Expand Energy, another producer based in Oklahoma City, is down 12%.
Pipeline companies are building more routes out of Texas, but most of those won't be completed this year, Rezvan said. "It should get less terrible next year and then a little less terrible in 2028," Rezvan said.
Texas natural gas producers have what the world wants. But "terrible" prices for their output may not be going anywhere soon.
Write to Avi Salzman at avi.salzman@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 24, 2026 16:34 ET (20:34 GMT)
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