By OGJ editors
HOUSTON, Oct. 30 -- Canada has sufficient oil and natural gas supplies to meet winter demand, although price volatility is likely, the National Energy Board said.
"Markets here cannot help but be affected by the current volatility of world commodity markets," NEB Chair Gaetan Caron said Oct. 30 in his agency's winter energy outlook.
Fuel prices have declined on a combination of factors, including a deepening global financial crisis, falling demand, and a worsening US and global economic outlook.
NEB forecast crude oil could average $50-75/bbl this winter on the New York Mercantile Exchange, where natural gas could average $6-9/MMbtu.
Heating oil prices are expected to track crude oil prices, which means average Canadian heating oil prices probably will be lower than last year.
Strong US natural gas production has helped to keep gas prices low while helping ensure adequate gas supply.
Canadian drilling activity remains down from its 2005-06 winter peak, NEB said.
"Relative to the previous winter, Canadian production is expected to continue trending downward," given slowing gas drilling activity combined with declines in the initial productivity of new wells, NEB said.
