Canada's Gas Extraction Industry: Industrial Outlook, Winter 2007
The Conference Board of Canada, 9 pages
February 16, 2007
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
- 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.