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Continuing energy price volatility this summer

News Release

07/17
For immediate release
30 May 2007

Continuing energy price volatility this summer

CALGARY - Another summer of energy price volatility and continuing geopolitical uncertainty are the key messages in the Summer Energy Outlook released today by the National Energy Board (NEB). The outlook highlighted how geopolitical events, weather and storage supplies may impact energy prices during the upcoming season.

The NEB anticipates that as long as there are no major supply disruptions arising from geopolitical events and hurricane activity in the Gulf of Mexico, the price of crude oil will likely average between US$60-65 per barrel this summer. Low gasoline inventories in the U.S., going into the summer driving season, will continue to provide upward pressure on gasoline prices.

In addition, the slightly lower production of Canadian natural gas is expected to be offset by a combination of increased production in the U.S. and higher liquefied natural gas (LNG) imports south of the border, leaving the overall supply of natural gas in North America stable.

Gas storage will fill in preparation for the North American winter heating season and is expected to reach volumes comparable to last year's. As for prices, they are not likely to change much from the US$6-$8/MMBtu (million British thermal units) range over the course of the summer. However, price increases could still occur as a result of exceptionally hot weather or hurricane-induced supply disruptions. At the same time, unusually heavy imports of LNG to the U.S. could quickly increase the storage levels in preparation for winter and could even result in a price decline, but this likely wouldn't happen before fall.

Barring any uncontrolled circumstances, such as extreme weather events and unplanned outages, the provinces and territories are expected to have an adequate supply of power generation to meet summer electricity demands. With the exception of Ontario, most electricity consuming regions in Canada tend to have winter-peaking systems. This is why there is often a supply of electricity available for export in the summer, and that should be the case again this summer.

The NEB is an independent federal agency that regulates several parts of Canada's energy industry. Its purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest, within the mandate set by Parliament in the regulation of pipelines, energy development and trade. 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.

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For further information:

Carole Léger-Kubeczek
Communications Officer
National Energy Board
E-mail: carole.leger-kubeczek@neb-one.gc.ca
Telephone: 403-299-2717
Telephone (toll free): 1-800-899-1265
Telecopier: 403-292-5503
Telecopier (toll free): 1-877-288-8803
TTY (Teletype): 1-800-632-1663

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Date Modified:
2011-10-28