Canadians Won't Pay More at the Pumps This Summer - Gasoline Prices Predicted To Be Similar to Last Year's Prices

CALGARY, May 23, 2013 /CNW/ - Canadians can expect to pay about the same for gasoline this summer as last summer, while the price of natural gas could see an increase along with electricity prices, depending on where you live, said the National Energy Board (NEB or Board) today in its latest Summer Energy Outlook.

This summer the Board is predicting the price of West Texas Intermediate to average between US$90 and US$100 per barrel, while the price of Brent (the North Sea benchmark crude) is forecast to average between $100 and US$110 per barrel. The Canadian price for regular gasoline will average between $1.20 and $1.30 per litre this summer, similar to last summer's average Canadian price of $1.27 per litre.

Large commercial inventories of crude oil and petroleum products in the United States (U.S.), Japan and Europe; growing non-OPEC (Organization of the Petroleum Exporting Countries) supply; and sluggish global economic growth are the contributing factors for the expected stable crude oil markets over the outlook period of May to September. However, ongoing geopolitical tensions, particularly in the Middle East and North Africa, could affect supply and lead to higher crude oil prices.

For electricity, all provinces should expect adequate supply this summer. Ontario wholesale on-peak prices are forecast to range between $35 and $45 per megawatt hour (MW.h), slightly higher than the five-year low average price of $29 MW.h observed last summer. On-peak prices in Alberta are expected to be higher this summer, averaging between $95 and $105 per MW.h, up from last summer's average price of $86 per MW.h. Saskatchewan, Manitoba, Québec, Nova Scotia and Newfoundland saw electricity rate increases earlier this year, and as a result, these provinces are not expecting higher prices for the forecast period. 

Natural gas prices this summer will be higher than last summer, averaging between $3.25 and $3.75 per gigajoule at the Intra-Alberta hub and between US$4.00 and US$4.50 per million British thermal units at Henry Hub. Prices are anticipated to increase from last summer's low gas prices due to average storage inventories at the start of the storage injection season (April) and slower growth in natural gas production. However, forecasts for natural gas prices this summer are still below recent historical summer averages.

Coal-to-gas switching in electricity generation in the U.S. this summer is expected to occur at a slower pace than last summer. Despite expectations for a warmer than average summer, the possibility of higher natural gas prices this summer could affect the economics of gas versus coal for electricity generation.

Natural gas production in Canada and the U.S. averaged 79.9 billion cubic feet (Bcf) per day in 2012 and this level of production is expected to remain steady for the next six months, despite decreasing drilling activity. Liquefied natural gas imports into North America are forecast to be modest, averaging 0.5 Bcf per day over the outlook period. Heading into the summer, combined natural gas storage inventories in Canada and the U.S. are expected to be below last year's record levels, but remain within the five-year range.

The National Energy Board is an independent federal regulator of several parts of Canada's energy industry with the safety of Canadians and protection of the environment as its top priority. Its purpose is to regulate pipelines, energy development and trade in the Canadian public interest.

This news release is available on the NEB's Internet site at www.neb-one.gc.ca under What's New!

SOURCE: National Energy Board

Brianne Rohovie
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