New pipelines have eased the natural gas glut in West Texas, but planned drilling activity could reverse those gains. Meanwhile, crude oil has an 8.4% probability of hitting a new all-time high by September 30, according to market forecasts.
How the pipelines helped
For months, West Texas producers struggled with a glut of natural gas, much of it associated gas from oil drilling. Limited pipeline capacity meant gas was often flared or sold at negative prices. New pipeline projects have changed that. They've opened up routes to Gulf Coast markets and LNG export terminals, pulling gas out of the basin and firming up local prices.
Drilling plans could reverse the gains
But the relief may not last. Producers are signaling they'll ramp up drilling in the Permian Basin. More drilling means more associated gas. If those plans go ahead, the extra supply could overwhelm the new pipeline capacity. The glut could return, and prices could slide again. It's a cycle that's played out before in the region.
Crude oil's record run
Separately, crude oil is drawing attention. Market data gives it an 8.4% chance of reaching a new all-time high by the end of September. That's a specific probability, not a guarantee. It reflects tight supply and steady demand. If oil does hit that record, it would add pressure on the broader energy market and could influence drilling decisions in West Texas.
The next few months will tell. Pipeline operators are watching drilling permits. Traders are watching oil prices. And producers are watching both. The question is whether the new pipelines can handle what's coming.
