US shale producers are turning a gas glut into a competitive advantage for domestic manufacturing and AI data centers. Negative prices in the Permian Basin keep fuel costs low amid global supply shocks.
The Iran war has tightened natural gas supplies worldwide, driving up prices in Europe and Asia, while the United States continues to produce record volumes of oil and gas from the Permian Basin.
Permian gas hit an all‑time low of –$9.60 per MMBtu on April 24, and benchmark futures trade below $3. Europe and Asia futures are about six times higher. Utility gas prices fell 0.9% in March's CPI, and gas prices are expected to average well below $4 through 2027. Five new Permian conduits will add roughly 11 Bcf/d by 2028, about 10% of total U.S. gas production.
Chris Louney, director of global commodity strategy at RBC Capital Markets, said US gas prices have remained insulated from volatility, benefiting domestic industry. Diamondback Energy Inc. CEO Kaes Van't Hof told attendees that investors want the company to realize more than zero on its gas, noting that gas currently accounts for about 5% of revenue and could rise to 10%. EQT Corp. CFO Jeremy Knop highlighted the divergence, stating that global natural gas prices are rising sharply while U.S. prices are even lower than when the Iran War began. Dow Inc. is also capitalizing on the cheap industrial gas as a feedstock for chemicals.
With the Blackcomb Pipeline expected to come online in October and additional conduits adding 11 Bcf/d by 2028, the United States is poised to keep gas prices well below $4 through 2027, sustaining a competitive edge for manufacturing, chemicals, and AI data centers. The consortium led by WhiteWater will also bring new capacity, positioning the U.S. to weather global supply shocks and support domestic growth.
