Energy Supply to Keep Pace with Demand This Winter
For immediate release
4 November 2010
CALGARY – Canadian consumers can rest assured that energy markets will be well supplied this winter, the National Energy Board (NEB or Board) said in its latest Winter Outlook.
“With high levels of production and inventory we expect Canadian energy needs to be met this winter,” said Gaétan Caron, NEB Chair. “We expect to see similar energy prices to last year, with natural gas predicted to be slightly lower.”
Factors that influence energy prices include economic conditions, supply inventories, and weather. Weather is expected to have a significant impact on prices this winter in particular, with milder conditions predicted in eastern Canada and the United States. Milder weather could mean less demand and corresponding lower prices.
Crude oil prices are expected to average between US $75 and US $85 per barrel, similar to last winter. This price will depend on the pace of the ongoing economic recovery. Currently, world oil demand is increasing (steadily), while the Organization of the Petroleum Exporting Countries (OPEC) indicates that there is sufficient spare production capacity. This is likely to keep oil prices where they are for the winter.
With the price of home heating oil closely tracking the price of crude, average home heating prices this winter are expected to be about the same as last year. While growing demand will likely reduce inventories, a shortage is unlikely.
Steady natural gas production levels in North America and strong inventories mean prices will be lower than last winter. Natural gas prices are expected to average between US $3.50/MMBtu and US $4.50/MMBtu. While costs may be down, North American gas consumption is expected to experience a modest increase from last year. This growth will mainly come from power generation and industrial sectors.
Meanwhile, Canadians can expect electricity prices to be about the same as last year. Canadian electricity markets will have enough supply to meet demand that has been steadily growing since 2009. Both of Canada’s wholesale electricity markets, Alberta and Ontario, have experienced increased demand from the previous year. In the past year Alberta’s demand has increased by two per cent and Ontario’s demand has increased by four per cent.
The NEB is an independent federal agency that regulates several parts of Canada's energy industry. Its purpose is to regulate pipelines, energy development and trade in the Canadian public interest. As part of its mandate, the NEB monitors the supply of all energy commodities in Canada and reports its findings. The NEB Internet site is regularly updated with new energy information for the Canadian public.
This news release is available on the NEB’s Internet site at www.neb‑one.gc.ca under What’s New!
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National Energy Board