New natural gas price outlook

June 27, 2012
Written by
Ag Energy Cooperative is based in Guelph, Ontario.
Ag Energy Cooperative is based in Guelph, Ontario. Natural gas well (image courtesy CAPP - Canadian Association of Petroleum Producers, from their website).
Many views are being shared with respect to natural gas markets, says Michelle Vieira from Ag Energy Co-operative in Guelph, Ontario. "Several views are on the 'bearish' side, believing lower prices will continue. However, some factors point in the other direction."



Ag Energy supports targets, strategic buying and risk tolerance as well as providing you will a balanced energy market view. We urge you to consider the following:

-Storage was reduced by 20% during April and May

-Natural Gas rigs have decline over 35% since the beginning of the November 2011 gas year

-Cooling degree days are ahead of last year, suggesting an increase in cooling supply

-Oil prices offer higher returns for energy firms

-Natural Gas prices continue to sit at levels below those from five or even ten years ago – how low can they go? How high can they bounce?

In short, we believe that a 'bull' market may be waiting in the wings for later this year. As you can see below, the storage projections for the next four weeks continue to be lower than the weekly or five-year average. This may become the big issue as we move into fall/winter.


Michelle Vieira is the Sales, Operations and Member Relations Manager at Ag Energy Co-Operative in Guelph, Ontario.

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