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Natural gas market looks a lot like in 2012. This is why

Natural gas prices in the USA rebound as its production declines.

16.Jun.16 11:09 PM
By Anastasia Sutulova


Natural gas market looks a lot like in 2012. This is why

However, Canadian gas continues to be cheap despite the improving supply and demand outlook.

Though the conditions in the North American gas market are becoming more favourable, the gap between the Canadian benchmark and the U.S. benchmark remains very big.

Such situation highlights the similarities between the market today and 2012.

Back then, the USA had unusually high storage levels due to warm winter. That lead to a drop in gas prices the subsequent spring and summer. Lower prices provided for higher natural gas consumption in summer, which came back to normal by winter, and so did the prices.

If 2016 is 2012 again, we can expect that AECO (Canadian benchmark) will normalize later this year.

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