NEB Expects Moderate Energy Price Increases Over Last Summer

CALGARY, May 20 /CNW/ - Canadian consumers can expect that energy prices will continue to remain stable over the summer as energy demand will continue to increase alongside the global economy, says Canada's national energy regulator in this year's Summer Outlook.

What this means for consumers is that in the months to come energy prices will likely remain at moderate levels according to the National Energy Board (NEB or Board). However, with growing world oil demand, especially in non-OECD countries, there is the potential that oil/gasoline prices will increase slightly in comparison to the previous summer. The NEB expects that there are adequate energy supplies for the needs of Canadians.

"As the Canadian and global economies continue to recover, the demand for energy will return to previous levels," said Gaétan Caron, Chair of the NEB. "This has resulted in our expectation of moderately higher energy prices this summer over last."

This summer, the Organization of the Petroleum Exporting Countries' (OPEC) spare capacity and healthy global oil inventory levels are keeping world markets well supplied and reducing the pressure for price increases. Still, there are key uncertainties related to the global economic recovery. The NEB expects crude oil to average US $75 to $85 per barrel over the next six months.

Overall, gasoline prices in Canada are expected to average $0.95 to $1.10 per litre in most Canadian markets. However, gasoline prices can vary across the country due to provincial differences in taxation and price regulations, regional refinery production and transportation costs.

In the natural gas sector, ample production and storage levels will help moderate prices over the summer. As a result, natural gas is expected to trade in the range of US $4 to $5 per MMBtu.

Last year, crude oil prices averaged US $63 per barrel while natural gas prices were US $3.64 per MMBtu over the summer (April 1 to September 30).

For electricity, the Canadian supply is expected to be adequate over the next six months. Supply additions over the summer are low or zero emissions mostly natural gas fired generation, with over 1000 MW of new units coming online. As well, by the end of the year, several new wind farms should be operational in Canada, representing about 800 MW of new renewable energy supply. In some regions demand management programs have been successful in reducing electricity peak demand.

The NEB is an independent federal agency that regulates several parts of Canada's energy industry. Its purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest, within the mandate set by Parliament in the regulation of pipelines, energy development and trade. As part of its mandate, the NEB monitors the supply of all energy commodities in Canada and reports its findings. The NEB Internet site is regularly updated with new energy information for the Canadian public.

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

For further information: Erin Dottor ([email protected]), Communications Officer, Telephone: [phone], TTY (teletype): 1-800-632-1663