NEB: Canadian oil, gas inventories 'adequate' for winter

Supplies of heating oil and natural gas will be adequate for this winter, Canada's National Energy Board reported.

By OGJ editors
HOUSTON, Oct. 31 -- Supplies of heating oil and natural gas will be adequate for this winter, Canada's National Energy Board reported.

Even with a winter that is colder-than-usual, high storage levels of gas will be more than adequate to meet heating demand, NEB said in its winter outlook for Canada's energy markets.

The price for heating oil should track similarly to the price of crude, which will likely remain in the $75-80/bbl range throughout the winter, NEB said. Also, tightening supply inventories will continue to raise prices, it said.

North American gas futures prices are expected to hold steady between $6-8/MMbtu, NEB expects. Stronger gas production in the US as well as imported LNG will offset any decline in production from Canada.

In mid-October, oil prices crested to new record-highs, NEB said, driven by a combination of market speculation, Middle East political tensions, the low US dollar, and persistent refinery bottlenecks. The Organization of the Petroleum Exporting Countries agreed in September to raise its supply output by 500,000 b/d, starting in November. NEB said this supply increase should help to moderate recent high oil prices.

It added that despite high crude prices, Canadian consumers are not likely to see high prices at gasoline pumps until spring, as the high driving season, Apr. 1 to Labor Day, increases demand for gas.

Additionally, Canada's provinces and territories should have sufficient electricity supply to meet winter demand loads, unless they encounter extreme weather events or unplanned outages on their electricity grids, NEB said.

Most of the provinces' grids reach peak electricity use in the winter months. The provinces that generate most of their electricity from hydroelectric (Quebec, British Columbia, and Manitoba) have increased water levels behind their hydroelectric dams in anticipation of high electricity use for winter heating.

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