Despite abundant supply and storage, a seasonally normal winter weather forecast and a slow growing North American economy, natural gas prices this winter are expected to range between $2.75 and $3.25 per GJ. However, this winter’s record storage volumes could place downward pressure on natural gas prices.
Production increases in the U.S. and an unseasonably warm winter in 2011 resulted in a large storage overhang and 10-year low prices last spring. In response to these low gas prices, demand for gas from the U.S. power generation sector has increased considerably, resulting in a narrowing of the balance between supply and demand by mid-2012.
Check out the NEB's winter outlook here.