Natural gas attention in ‘precarious’ position as prices dive
Natural gas prices have slumped for several years in Western Canada, though strike a new low this summer. On a few occasions, prices fell to 0 and afterwards incited negative. Essentially, companies would have had to compensate income to get absolved of a gas they produced.
Commodities researcher Martin King did a double-take when he initial saw a reduction pointer in front of a healthy gas price. He even picked adult a phone and done calls to safeguard it wasn’t a mistake.
“It cost some-more to get it out of a belligerent afterwards to buy it on a mark market,” pronounced King, with GMP FirstEnergy, following a display to oil and gas attention members in downtown Calgary on Wednesday morning. He has followed gas prices for scarcely 25 years. “It’s a very, really surprising situation. I’ve never seen anything like it.”Â
‘It cost some-more to get it out of a belligerent afterwards to buy it on a mark market….I’ve never seen anything like it.’
– Martin King, GMP FirstEnergy
The proxy cost crashes were a outcome of upkeep on pipelines, that cut off some storage options and caused supply to behind up.
For an attention already struggling, this summer was scarcely tough, and a arriving winter might be only as bad. Natural gas producers are hoping Mother Nature serves adult a cold winter opposite North America, after a few scarcely calm years. Frigid temperatures would lead to some-more healthy gas being burnt to feverishness homes and businesses.Â
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“You can’t rest on weather, that is inherently unpredictable,” pronounced King. “At a finish of a day, Canada only needs some-more options for gas.”Â
Natural gas prices in Alberta fell next 0 for producers a few times this summer/fall. Analyst Martin King with GMP FirstEnergy: pic.twitter.com/gCKRpELMBm
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@KyleBakx
Those options have dusty adult recently after companies halted proposals to erect comforts on a West Coast to melt healthy gas and trade it overseas. While some LNG projects are still in a formulation proviso and could one day be built, there are few other options to use adult a healthy gas constructed in Alberta, besides the oilsands of northern Alberta requiring more healthy gas in destiny years and more power plants using on a fuel.
“For companies some-more unprotected to mark gas prices, what are we going to do? You can’t run an attention off 25-cent gas prices, so a lot of guys are starting to ask questions,” pronounced King, “How tolerable is this? How prolonged is this going to last?”Â
Natural gas mark prices in Alberta incited disastrous in new months.
The Canadian healthy gas marketplace is now in a “very precarious” conditions as supply keeps rising but as most expansion in demand, pronounced King.
Some companies are hedging their production, so they are guaranteed a certain cost formed on contracts. Other producers are perplexing to sell gas in opposite tools of North America so they can fetch a accumulation of prices.
Article source: http://www.cbc.ca/news/business/aeco-natural-gas-firstenergy-1.4371280?cmp=rss