US Natural Gas Price Volatility Unleashed Across Key Hubs
US natural gas price volatility varies greatly across key hubs, with Waha in the Permian Basin leading the pack. According to NGI's data analysis, Waha posted a coefficient of variation (CV) of -401% and an average price of -79.0 cents/MMBtu over the past six months. However, recent additions of takeaway capacity, including the Gulf Coast Express expansion and Hugh Brinson Phase 1, have helped temper price volatility.
The Permian Basin's propensity for outsized swings is unlikely to change anytime soon, with fluctuating crude oil prices and shifts between ethane extraction and rejection contributing to regional price variability. PG&E Citygate and SoCal Citygate followed closely behind Waha in terms of volatility, with CVs of 46% and 28%, respectively.
On the other end of the spectrum was Chicago Citygate, which matched Henry Hub for the lowest CV at just 7%. This relative calm is out of character with recent norms, both in magnitude and seasonality. However, a blast of cold weather this winter could quickly change the picture.