This time last year energy prices were on the rise, with crude oil hitting a record high of US $147 per barrel, while natural gas peaked at US $13/MMBtu in July. However the global economic downturn led to a dramatic drop in prices over the fall and winter.
The current economic situation, combined with the high inventories of both oil and natural gas, will continue to put downward pressure on energy prices heading into summer. The NEB is predicting crude oil to trade in the US $50 to $60 per barrel range, with natural gas prices to average between US $3.20 and $4.20/MMBtu over the summer.
"Canadians will find that the price of gas will not go as high as it did last summer," said NEB Chair Gaétan Caron. "At the same time, however, companies may respond to the low prices by further cutting production, which would mean a tighter energy market in the medium to long term."
On the electricity side, new power generation came on-line in several jurisdictions and transmission capacity was expanded between Ontario and Quebec and between New Brunswick and the U.S. in 2008. As a result, electricity supply is projected to be adequate to meet summer demand.
Canadian-American electricity trade volumes reached record levels in the summer of 2008, and are expected to remain strong this summer. Weaker economic conditions, however, may mean less demand from the industrial sector in the U.S. and Canada.