CALGARY, Nov. 14, 2012 /CNW/ - Canadians can expect to pay more for
natural gas this winter but supply will be plentiful, the National
Energy Board (NEB) said today in its latest Winter Energy Outlook.
Despite abundant supply and storage, a seasonally normal winter weather
forecast, and a slow growing North American economy, natural gas prices
this winter are expected to be higher than they were last winter due to
higher demand. Prices in Alberta are expected to range between $2.75
and $3.25 per GJ, while prices at Henry Hub in the U.S. are expected to
average between US$3.50 and US$4.00 per MMBtu. However, this winter's
record storage volumes could place downward pressure on natural gas
Production increases in the U.S. and an unseasonably warm winter last
year resulted in a large storage overhang and 10-year low prices this
spring. In response to these low gas prices, demand for gas from the
U.S. power generation sector has increased considerably, resulting in a
narrowing of the balance between supply and demand by mid-2012.
As of late October, North American natural gas storage was 4.62 trillion
cubic feet (Tcf), surpassing last December's storage volume of 4.54
Tcf. Compared with the five-year average volume for late October,
volumes of natural gas currently stored are eight per cent (0.36 Tcf)
Falling commercial inventories in the U.S., Japan and Europe, heightened
geopolitical pressures in the Middle East, lower forecasts for global
economic growth and growing supply in countries not affiliated with the
Organization of the Petroleum Exporting Countries are affecting crude
However, the NEB believes that these factors are balanced and, as a
result, West Texas Intermediate (WTI) prices will average between US$85
and US$95 per barrel this winter. Brent, the North Sea benchmark crude,
will continue to trade at a high premium to WTI and will average
between US$110 and US$120 per barrel this winter.
With winter fast approaching, demand for heating oil returns and
consumers can expect to pay prices slightly higher than they did last
winter. Planned and unplanned refinery outages in the U.S. have
affected petroleum product supply as distillate inventories in the U.S.
Northeast have declined well below the five-year low. However, weather
forecasts for a mild winter in the Maritimes may result in lower demand
for heating oil. The average heating oil price in Canada, including
taxes, is expected to average between $1.15 and $1.35 per litre this
As a result of U.S. refinery outages in the autumn, including the
aftermath of Hurricane Sandy and low inventories in the U.S., Canadians
can expect to pay slightly more for their gasoline this winter. The
national average retail price for unleaded gasoline is expected to
average between $1.20 and $1.40 per litre.
The NEB anticipates that domestic electricity markets will have adequate
supply this winter. New gas-fired generation and wind capacity will be
added towards year-end in Alberta, and two units at the Bruce nuclear
plant in Ontario have resumed service this fall, increasing supply in
both provinces. Prices this winter in the wholesale markets of Alberta
and Ontario are expected to remain below the five-year average,
averaging between $80 and $90 per megawatt hour (MW.h) and $27 and $37
per MW.h, respectively.
Electricity rates in other parts of Canada will vary from province to
province as multiple jurisdictions have already, or are planning to
increase electricity rates. Common reasons behind applications for rate
increases include replacement of aging infrastructure, inflation, and
higher cost of newly contracted generation.
The National Energy Board is an independent federal regulator of several
parts of Canada's energy industry with the safety of Canadians and
protection of the environment as its top priority. Its purpose is to
regulate pipelines, energy development and trade in the Canadian public
This news release is available on the NEB's Internet site at www.neb-one.gc.ca under What's New!
SOURCE: National Energy Board
For further information:
National Energy Board
Telephone (toll free): 1-800-899-1265
Facsimile (toll free): 1-877-288-8803
TTY (Teletype): 1-800-632-1663