For the first time in several weeks, we are seeing natural gas prices begin to climb. We continue to see spot pricing remain under $2 CDN/GJ, but rising nonetheless. While some analysts are saying a bottom has been reached…
technical traders are still suggesting that this current rise in prices is simply temporary and unless the next level of support at $2.40 US/MMBtu can be breached, we will be right back down to $2 US/MMBtu in no time.
There continues to be a never-before-seen surplus in storage levels to both the five-year average and last year’s groundbreaking numbers. This year, we started the injection season over 50% higher than we did last year and we anticipate storage to be completely full by the end of August.
It will take an extremely hot summer and significant cuts to shale production in order for storage numbers to ease and prices to rebound and remain strong. Even still, we may reach storage capacity, at which point natural gas will be flooding the market and suppressing prices further.
Could a $1 US/MMBtu handle be possible yet again this year? We will have to wait and see.
Lisa Brodeur is Quality Assurance Supervisor with 360 Energy in Burlington, Ont.
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