IN THE NEWS / Improved Outlook For Canadian Gas Producers
By THE FINANCIAL POST
Canadian gas producers can expect good prices but more competition for U.S. natural
gas markets in the upcoming year, a new survey indicates.
Arthur Andersen & Co. yesterday released its annual outlook on the oil and gas
industry, based on responses from 83 oilpatch executives.
Participants believe gas prices in the United States will be only 2% below last year's
projections, compared with a 20% shortfall for oil. Gas is expected to average $2.25
(US) per thousand cubic feet.
That's good news for Canadian energy firms, which export more than half of the
country's annual production of about five trillion cubic feet to U.S. customers.
Competition for these buyers will increase, however, because almost half of all
exploratory drilling south of the border in 1999 will target gas, up from 20% this year.
Survey respondents estimated oil will fetch $16 (US) a barrel next year.
The Paris-based International Energy Agency said warm weather and a global
economic slowdown cut demand in the final quarter of this year by 600,000 barrels a
day.
The agency predicts daily demand next year will grow by 1.9%, or 100,000 barrels,
to 75.7 million.
Oil prices have fallen 45% in the past 15 months. The sharp downturn is reflected in
the number of rigs drilling wells in Western Canada. Only half of the rig fleet is now
working, compared with more than 94% a year ago. |
