Permian Price Volatility May Shift to Gulf Coast Hubs
Devon Energy warns that Permian Basin natural gas price volatility may not dissipate even after pipeline buildout is complete. The company believes that the next dislocations could emerge at Gulf Coast hubs due to LNG exports outpacing storage additions.
The Permian Basin has experienced significant price swings in recent years, driven by a mismatch between supply and demand. Devon Energy executives argue that this volatility is unlikely to be resolved solely through pipeline infrastructure development.
The company's executives suggest that the shift in volatility could occur at Gulf Coast hubs, where LNG exports are growing rapidly but storage capacity has not kept pace. This could lead to price dislocations as LNG exports compete with other demand sources for limited storage capacity.