Canada's Gas Extraction Industry: Industrial Outlook, Winter 2007

The Conference Board of Canada, 9 pages, February 16, 2007
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The Canadian Industrial Outlook Service includes detailed five-year forecasts in 16 key Canadian industries. The report examines the short- and medium-term economic and profitability outlooks for these industries.

Document Highlights

  • Above-average temperatures in the closing months of 2006 alleviated demand for natural gas in North America. As a result, prices plunged, averaging below $6 per gigajoule in the second half of 2006. Natural gas prices are expected to rise throughout the forecast period, converging with crude oil prices on an energy-equivalent basis.
  • Natural gas production in Canada is projected to increase by a meagre 0.2 per cent in 2007, following a decline of 1.1 per cent in 2006. Production is forecast to fall over the rest of the forecast horizon, leading to a drop in exports.
  • Because of a decline in production and lower prices in the second quarter of 2006 onward, profi ts in Canada’s natural gas industry fell in 2006. Although natural gas prices are expected to bounce back, a decline in production throughout the rest of the forecast horizon will limit profi t growth.

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