Canadian Oil

[Tackler]

NP says gas outlook bleak, EnCana hopes for price spike

2007-06-21 07:29 MT - In the News

The National Post reports in its Thursday, June 21, edition that Merrill Lynch & Co. offered a bleak short-term outlook for North American natural gas prices Monday. The Post's Jon Harding writes that natural gas prices have fallen to their lowest point since April. Merrill said weak fundamentals are weighing heavily on spot and short-dated natural gas prices. Price volatility for the heating and power generation fuel is on the rise, Merrill said. "Natural gas looks like a dog for the next three months, although we are bullish further out, in the six-to-12-month range," said Merrill analyst Francisco Blanch. Mr. Blanch noted in a report that natural gas inventories are high and continue to grow, domestic production in Mexico is increasing and an "armada" of liquefied natural gas supply is hitting United States shores. Natural gas stockpiles in the United States are brimming. Canaccord Adams earlier this month warned natural gas prices are poised for a significant downward dip, "if activity levels remain elevated and hurricane activity does not absolutely destroy Gulf of Mexico production." EnCana chief Randy Eresman said price spikes as early as the summer could not be ruled out.