In The News / Canadian Oil Patch
Energy sector seen as economic driving force as natural gas, oil prices soar
Canadian Press - Wednesday February 26, 2003
By JAMES STEVENSON
"While we believe that the economy will continue to move in a positive growth curve through 2003 and 2004, many of the traditional high-performing sectors such as auto parts and vehicle manufacturing will start to falter," BMO chief economist Tim O'Neill said.
Meanwhile, Scotiabank said its commodity price index - which measures price trends in Canada's major exports - recorded a 22.9 per cent year-to-year increase, due primarily to energy prices.
The reports came on the same day that crude oil prices jumped a further $1.64 US per barrel Wednesday to $37.70 US - a price not seen since 1990.
Meanwhile natural gas prices fell 44 cents US to $9.13, but remain nearly four times higher than last year's levels.
Scotiabank commodities specialist Patricia Mohr said the higher natural gas prices coincide with a dramatic increase in global oil prices as the threat of war in Iraq and larger instability in the oil-rich Persian Gulf region remain high.
But natural gas prices may actually stay high even after oil declines, she said.
"While the current 'war premium' in oil prices will likely fade over the next six to 12 months, a fundamentally tight North American supply-demand picture is expected to keep natural gas prices strong for some time," said Mohr.
Greg Stringham, vice-president of markets for the Canadian Association of Petroleum Producers, agreed the energy industry "will continue going forward fairly strongly.
"And we've been investing 90-plus per cent of the revenues back into Canada and even at these higher revenue levels, that continues going forward," Stringham said.
Canadian Natural Resources (TSX:CNQ) announced Wednesday that they would more than triple the number of gas wells drilled this year compared with 2002.
And while the Calgary-based company admitted that commodity prices remain "extremely volatile," Canadian Natural said extra revenues will be used to pay down debt and to enhance drilling programs even more. |
