Permian Gas Keeps Outrunning Crude, Adding Supply Weight to German Baseload

Permian Gas Keeps Outrunning Crude, Adding Supply Weight to German Baseload EIA data show Permian gas up 60% since 2021, outpacing crude and weighing on TTF and German baseload forwards, even as European tightness pushes back. The US Energy Information Administration reported on Thursday (2026-06-18) that marketed natural gas production in the Permian basin climbed 60% between 2021 and 2025, from 17.2 billion cubic feet a day to 27.6 Bcf/d, outrunning the 39% rise in the basin's crude output over the same span.⁵ More gas comes up the well whether or not it pays, because the Permian is an oil play and most of its gas is associated. That gas-to-oil ratio averaged nearly 4,200 cubic feet per barrel in 2025, up 16% from 3,628 in 2021, the agency said. Had the ratio held flat, the basin would have pumped just 23.8 Bcf/d last year, 14% below what it actually produced.⁵ For German baseload the relevance runs through molecules, not headlines. Associated gas that keeps flowing regardless of drilling discipline feeds the US balance, and through liquefied cargoes it reaches the price German plants pay to burn gas.⁵ The agency expects the trend to extend. It forecasts Permian output at 29.2 Bcf/d in 2026, 6% above 2025, with a further 10% gain pencilled in for next year, and sees Lower-48 marketed production up 3% this year.¹ Haynesville, a dry-gas region, is seen growing 6% this year and 8% next.¹ Near-term supply already looks ample. Lower-48 dry gas production ran at roughly 109.3 Bcf/d on Wednesday (2026-05-20), up 1.4% from a year earlier and close to record highs, while domestic demand sat near 73.0 Bcf/d, fxempire reported.² LNG export flows held at 17.8 to 18.1 Bcf/d, but seasonal maintenance at terminals capped feedgas pull and left more supply for the domestic market.² Whether that loosens Europe depends on the Atlantic arbitrage. Henry Hub front-month traded near $3.21 on Friday (2026-06-19), while front-month ICE Endex TTF eased to about €41.81. [live_prices] With the European hub priced far above US gas plus shipping and regasification, the arb stays wide open, and rising US supply supports the cargo stream into northwest Europe.² That is the bearish case pressing on German baseload. The front-month contract sat at €102.18 on Friday (2026-06-19), with Q+1 at €103.44 and Cal+1 down at €94.98. [live_prices] Cheaper imported gas would pull the marginal cost of German thermal generation lower.² The curve already prices the back end below the front. [live_prices] The counterweight is European, and physical. Germany's supply margin was set to drop to its lowest level of the winter around 2026-05-18, OilPrice.com reported, citing Bloomberg models, as low wind speeds and colder weather strained the system.⁴ Elenger described a first quarter marked by rapid storage depletion and tight fundamentals heading into what it called a challenging injection season.³ Those forces explain why the read is close to balanced rather than cleanly lower. Supply growth out of the US argues one way; thin German margins, weak wind and a depleted European storage stack argue the other. Neither has won out, and the spread of bullish and bearish signals across the German curve is roughly even.^4,3 What tips it is mostly mechanical. The end of LNG terminal maintenance would pull feedgas back up and tighten the US balance the bears are leaning on.² The EIA's own forecast assumes Permian takeaway constraints ease later this year, the precondition for the double-digit growth it sees into next year.¹ German wind, the swing factor on the demand side, decides how much of the cheaper gas the curve gets to price.⁴