Canadian Industrial Outlook: Gas Extraction—Winter 2018

The Conference Board of Canada, 16 pages, April 16, 2018
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This report examines the short-and medium-term economic and profitability outlook for Canada’s gas extraction industry.

Document Highlights

  • Prices Remain Weak—Natural gas prices are gradually recovering from their 2016 low. In 2018, the Henry Hub price will average US$3.21 per MMBtu and the AECO-C average will be C$2.11. Growing global demand should support further price gains, but an abundance of global supply will keep the Henry Hub price below US$4 over the forecast period.
  • Rising U.S. Production—In the U.S., soaring shale gas production will reduce the need for gas imports from Canada over the medium term. At the same time, Canadian producers face increasing competition at home from imports of cheap U.S. gas. Increasing exports of liquefied natural gas from the U.S. is also crowding Canadian gas out of overseas markets.
  • Weak Investment—With Canada’s gas industry facing considerable uncertainty, investment in natural gas has been volatile in recent years, as many producers have held back on or abandoned new projects. Investment is projected to decline again in 2018, before starting to gradually rise again next year.

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