US EditionCanadian natgas producers cut output amid record low prices: Report
Producers cut output amid a supply glut and pipeline bottlenecks, with Alberta AECO hub prices averaging minus 5 cents per MMBtu this week, analysts said.
- Natural gas producers in Western Canada, including Calgary-based Advantage Energy, have cut output amid record low prices this week at the AECO hub in Alberta.
- The output cuts respond to an ongoing supply glut caused by pipeline bottlenecks, high storage levels, warmer winters, and slow LNG Canada ramp-up in British Columbia.
- Pipelines such as TC Energy's NGTL and Great Lakes Gas Transmission systems face planned and unplanned maintenance that trap supply, forcing producers to either shut wells or pay takeaway costs.
- AECO spot prices averaged negative 5 cents per MMBtu on Thursday and reached an unprecedented low of minus 18 cents earlier this week, with Advantage Energy's CEO Mike Belenkie describing the situation as the most prolonged period of extremely low prices they have experienced.
- Analysts including Martin King anticipate that supply cutbacks will persist through the end of the month; however, contractual and marketing challenges have prevented reductions from reaching a level sufficient to fully stabilize the market.
10 Articles
10 Articles
Record-Low Canadian Natural Gas Prices Prompt Production Curbs
Canadian natural gas producers are curbing output due to record-low negative pricing at the AECO Hub, driven by a warmer winter, sufficient storage, and increased production in anticipation of LNG Canada's export facility.
Canadian natgas producers cut output amid record low prices
Some natural gas producers in Western Canada are aggressively cutting output in an effort to ease an ongoing glut that this week tipped prices for the fuel into record negative territory, companies and analysts said.
Alberta's natural gas market has recently experienced a rare phenomenon: spot prices have plunged into negative territory for several consecutive days, forcing some producers to implement large-scale production shutdowns. Industry insiders believe that while this phenomenon is a short-term supply-demand imbalance, it also highlights the long-term pressure on the natural gas market in Western Canada.
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