On November 11, 2024, U.S. spot natural gas prices reached a 25-year low at the Henry Hub benchmark in Louisiana, driven by forecasts of mild weather and reduced heating demand. Prices at the Waha Hub in West Texas fell into negative territory for the 47th time, marking a significant drop.
Next-day prices at the Henry Hub decreased approximately 19%, settling at $1.21/MMBtu, the lowest since December 4, 1998. Meanwhile, Henry Hub futures for December delivery increased around 10% to a five-week high, influenced by a recent decline in output and expectations for colder weather later in the month.
The Waha hub experienced a staggering 431% drop, with next-day prices plummeting to negative $1.06/MMBtu. This decline can be attributed to ongoing pipeline constraints due to maintenance on Kinder Morgan's 2.7-Bcf/d Permian Highway gas pipeline, which is anticipated to conclude on November 14.
Historically, Waha prices have traded below zero multiple times, particularly in 2019, 2020, and once in 2023, primarily due to similar pipeline constraints. In contrast, Henry Hub prices averaged $2.10/MMBtu in 2024, a decrease from $2.54/MMBtu in 2023 and a five-year average of $3.49/MMBtu.
As of now, Waha prices have averaged $0.60/MMBtu in 2024, down from $1.82 in 2023, with the lowest annual average recorded at $0.91/MMBtu in 2019.