Canada: Natural gas prices hit four-month high

Canadian natural gas prices hit a 4-month high amid forecasts of cooler weather across North America and declining supplies in Canada. Benchmark AECO natural gas spot prices stood at $3.42 per gigajoules ($3.61 per million cubic feet) at close yesterday, a level it last traced on November 22, 2012, according to NGX, which is the standard benchmark for AECO pricing. Aside from November 22 and November 23 of last year, this would be the highest prices since early September 2011, according to Martin King, an analyst at First Energy Capital.

Canadian natural gas prices have also rebounded after crashing to a decade low of $1.43 per Btu in April 2012, compelling energy producers to slash investments in gas drilling and focus on liquids.

“Natural gas supplies in Western Canada continue to remain very stable, despite what has been a relatively muted level of drilling,” Mr. King said in a note to clients.

“We believe that new well tie-ins and a shift toward more natural gas supply coming from the western side of Alberta from the higher productivity wells of the deep basin and shale deposits, are responsible for this more stable trends.”

Source: business.financialpost.com