CALGARY – A new survey suggests the vast majority of North American exploration and production companies believe natural gas prices have hit bottom.
The report by RBC Capital Markets and the Economist Intelligence Unit looked at the economic effects of growing shale gas production.
A whopping 87 per cent of exploration and production market participants surveyed predict natural gas prices will stay the same or increase over the next two years.
And 73 per cent of respondents expect a price increase of 10 per cent or more in the next five years.
Natural gas for March delivery was at about US$3.42 per 1,000 cubic feet on the New York Mercantile Exchange on Tuesday — a big improvement from last year’s sub-$2 prices, but still too weak for drilling in many gas regions to be economically viable.
That’s why more and more firms are chasing after more lucrative liquids-rich natural gas, which fetches a much higher price than dry gas does.