FORT ST. JOHN, B.C. – According to an article in the Globe and Mail, colder temperatures are driving up natural gas prices.
The article points to new exports of fuel that began this year with the startup of a LNG facility on the U.S. Gulf Coast. A expansion of the plant is expected to happen in 2017, which will increase demand even more.
The market for oil and gas was weak for the past two years forced many to cut drilling. The article states however that gas production in places like the Montney here in B.C. and Alberta has gone up as technology has gotten better and costs dropped.
Martin King, analyst at GMP FirstEnergy said to the Globe and Mail that gas will continue to be needed.
“If you buy our view that we’re not going to be going back below $3 (U.S) [per million British thermal units], at least on a sustained basis, for the next couple of years, that puts a lot of the North American resource back in paying economic territory. It wasn’t going to happen at $2 or $2.25,” Mr. King said. “And a lot of that gas is still going to be needed, wind and solar aside.”
In the U.S., natural gas prices have gone up nearly 20% over the past month according to the article. Prices have gone up 80% from a year ago.
Prices have gone up from the cold weather the article states.
“Higher gas prices and hopes for more of the same have helped lift the shares of some of the companies whose production is weighted toward the fuel. Birchcliff Energy Ltd. is up 11 per cent since the start of November, Seven Generations Energy Ltd. is up 7% and Tourmaline Oil Corp. is up 3%.” – The Globe and Mail
Canadian natural gas production has fallen over the past year, to 15.1 billion cubic feet a day from 15.5 billion last December, according to the National Energy Board.