Recovery will drive energy demand
Calgary—Energy demand is expected to grow this winter, as the economy starts to recover, according to the National Energy Board (NEB).
Its annual Winter Outlook report predicts Canadian crude oil prices between US$75 and $80 per barrel over the winter. Inventories of natural gas are robust, so prices are expected to range between US$4 and $5.50 per million British thermal units.
"With renewed signs of economic recovery in Canada and around the world, and with the winter heating season under way, energy demand is expected to grow," said NEB chair Gaétan Caron. "But with surplus inventories for all our energy commodities, we are well positioned to handle any increased demand."
Sustained cold weather or a strong economic recovery could push prices above that range but, on average, Canadians who heat their homes with natural gas will pay less this winter.
Weak demand and high storage inventories have kept natural gas prices low, according to the board.
As a result of low prices, drilling activity in Canada and the US is roughly half the levels of previous years. The fall-off in drilling will lead to a small reduction in supply over the winter, which should help rebalance the market later in 2010.
With regard to electricity, reduced demand and good capacity will lead to low wholesale prices and adequate supply. Trade in electricity is down nearly 30 per cent below the record levels set one year ago, the board reported.
Canada’s energy supply mix will also continue to diversify, with ongoing investment in cleaner technology. Natural gas-fired generation in Canada is expected to be up 50 per cent this year, over 2007 levels. Wind power generation is expected to double the capacity of 2007.