Winter Energy Outlook

The National Energy Board recently released its annual Winter Energy Outlook (144KB PDF). If that doesn’t sound like important news, you haven’t been paying attention.  

For the uninitiated, the National Energy Board’s seasonal forecast is an invaluable tool.  It’s an independent, dispassionate and unbiased analysis of current and future trends that will impact your bottom line as an energy consumer.  

Energy trends don’t happen in a vacuum.  Whether you call it a crisis, a panic, or a simple downturn, the current global economic situation has profound effects on the cost of energy.  

There is now a volatile and uncertain environment for energy market, significantly impacting energy demand and prices. For consumers, it’s a mixture of good and bad news. The Winter Energy Outlook highlights three key trends: 

1. Crude oil prices are expected to stay between US$50 and US$75 per barrel.  That’s contrary to recent trends that saw record highs for oil. This may eventually mean cheaper fuel costs for consumers.   
2. Natural gas prices are expected to remain disconnected to the price of crude – and cheaper – assuming winter 2008/2009 sees “normal” weather.  That’s just in North America, mind you.  Europe and Asia, where the price is tied to crude, will see more expensive natural gas.  
3. Overall, the electricity situation is described as “adequate.”  That said, problems may arise in Western Canada.  Demand has outpaced supply for several years, and reserves are being depleted.  In the centre and east, demand might actually decline, as the hard-hit manufacturing industry may shut down some plants and mills.