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Drilling Boom in Hottest U.S. Oil Play Is Bad News for Gas Bulls

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A drilling surge in America’s hottest oil play may prove to be a pitfall for natural gas bulls.

As explorers extract crude from the Permian shale in West Texas, they’re also producing gas. A jump in the number of rigs operating in the basin is adding to the so-called fracklog, or the number of drilled wells that are waiting to be connected. That’s a sign that gas output from the region will jump by about 25 percent over the next year, threatening to send prices below $2 per million British thermal units, according to Tudor Pickering Holt & Co.

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Written by Naureen Malik for Bloomberg.com

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