Sat. Feb 24th, 2024

A drop in demand and temperatures lenient erasures cause the price of natural gas to fall

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The winter of 2024 is rather mild, which reduces demand for natural gas, used to heat certain buildings and to produce electricity.

Radio-Canada

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The mild temperatures this winter, which have the effect of reducing residential and industrial demand for natural gas, are causing the price of natural gas to fall.

Gas Natural currently trades at around $2.09 per million BTU (British thermal unit), while at its peak, in May 2022, it sold for over $7.50.

< p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">Canadian natural gas prices are about 25% lower than the same time last year.

This can be explained in particular by the level of production and storage of natural gas in western Canada. The winter is also rather mild, which reduces the demand for natural gas, used to heat certain buildings and to produce electricity.

Even the Arctic cold snap that Alberta experienced in January did not have a significant impact on gas prices.

The situation is similar in the United States, according to Christopher Louney, an analyst at RBC Capital Markets. He predicts prices will rise once some liquefied natural gas (LNG) projects come online.

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I think producers are certainly looking towards next year instead that towards this year, which continues to be difficult, he said.

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LNG Canada's facilities in Kitimat, British Columbia, are expected to come online in the coming months.

The completion of LNG Canada's marine export terminal project in Kitimat, British Columbia, could notably affect the gas prices.

This could be enough to change the market balance and improve prices […], but it&#x27 This is an untested idea. No one is really sure, says Martin King, senior analyst at RBN Energy, an energy market analysis firm.

With information from Kyle Bakx

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