Natural gas prices remain depressed
Posted Nov 21, 2011 1:02 pm.
This article is more than 5 years old.
Natural gas prices hit a one year trading low Monday.
Edward Kallio with the Ziff Energy Group tells 660News gas prices traditionally bottom out at this time of year, during what’s called the shoulder season.
“Especially in the U.S. when there isn’t any heating load and there’s no air conditioning load,” says Kallio. “That’s when you see prices plummet.”
So what’s the problem with natural gas prices?
Kallio says it’s the law of supply and demand.
“Just because of low demand in North America, combined with all this new shale supply that’s come on,” he says. “We’re up about five BCF’s” (billion cubic feet) “a day from last year at this time. So there’s been a lot of gas that’s come on.”
Kallio says high pipeline transportation costs are forcing many Alberta producers to put their gas in storage. A hearing on those tolls will be held next year.
He adds with North American awash in natural gas, prices for the commodity will likely remain depressed for the next 3 to 4 years, which is bad news for producers but good news for consumers. He predicts it will be 2015 or 2016 before prices get back to the $5 range.
