Today, Deloitte’s Resource Evaluation & Advisory group released its current Canadian domestic oil and gas price forecast. The firm suggested that strengthening prices during the second quarter would be likely to continue, and would result in a stronger second half of the year for Canadian oil and gas producers.
Deloitte’s June 30, 2014 forecast shows a WTI oil real price of US$100.00/bbl for 2014, decreasing to US$93.00/bbl for 2015 and eventually leveling out at US$85.00/bbl by 2018. Deloitte has forecast a US$7.00/bbl differential between WTI and Edmonton par that will decrease to US$2.00/bbl over the long term to match pipeline tariffs between the two markets. With respect to natural gas, Deloitte’s June forecast shows natural gas at an Alberta AECO real price of C$4.80/Mcf in 2014, dropping to $C4.40/Mcf for 2015 and up to C$6.00/Mcf by 2024. Deloitte’s NYMEX real price is at US$4.60/Mcf throughout 2014, dropping to US$4.35/Mcf for 2015 and up to US$5.80/Mcf by 2024.
Deloitte Senior Manager Resource Evaluation & Advisory, Andrew Botterill, said:
April through June has seen a strengthening of Canadian oil and gas prices as the U.S. works to refill their massive storage volumes and satisfy strong domestic demand. This has increased our confidence in a stronger second half of 2014. But the long-range futures markets still indicate both oil and gas will remain softer for 2015 and beyond without increased exports to markets other than the U.S.