Commodities
Frac Spread Hits 2-Year High on Weak Gas Prices
The frac spread, a gauge of extracting NGLs from raw gas, reached $6.15/MMbtu last week, its highest level since February 2024.
This significant increase is attributed to weak natural gas prices combined with strong NGL prices, resulting in a wide price differential.
The frac spread is calculated by subtracting the Henry Hub natural gas price from the weighted average price of Mont Belvieu NGLs on a dollars-per-MMBtu basis. Since January 2026, this spread has surged 165%, while natural gas prices have dropped 20% and NGL prices have risen 50%.
The average annual frac spread has historically ranged between $2.38/MMbtu in 2020 to a high of $5.30/MMbtu in 2021, averaging just over $4.00/MMbtu since 2017.