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The Fort McMurray Fire's Impact on Natural Gas Prices

5/11/2016

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Unpredictable events can significantly impact commodity prices.  A hurricane in the Gulf of Mexico can send natural gas prices soaring.  A heat wave in California can lead to a sudden increase in electricity prices.  The recent tragic fires in the Fort McMurray area are having a significant impact on spot natural gas prices.  As indicated in the attached article, the Alberta oilsands operations use a tremendous amount of natural gas.  Since many of those operations had to be shut down due to the fires, the resulting huge oversupply of natural gas in the province has resulted in spot prices under $0.30/GJ.  We don’t expect the current situation to last for very long or to have a major impact on term natural gas pricing but it does show how unforeseen events can cause prices to change rapidly.  This underscores the value of fixed pricing if budget certainty is critical to your business.
http://medicinehatnews.com/business/2016/05/10/alberta-natural-gas-producers-could-lose-money-because-of-wildfire-analyst/
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