Canada's National Energy Board has added its voice to the chorus of authorities predicting high gas prices for the summer months.
According to the board's summer outlook released on Wednesday, the price per barrel of crude oil will average at about US$130 per barrel.
The report says supply and demand will continue to stay closely in sync with each other because of:
- the annual increase in usage during summer months
- international conflicts putting supplies at risk
- weakness of the U.S. dollar, resulting in more investment money flowing into commodities such as oil
With oil prices staying high, prices at the pump are sure to do the same, the group's chairman said in a statement.
"Global oil prices continue to rise," wrote Gaetan Caron. "What happens in world crude oil markets this summer will largely determine the price of gasoline in both Canada and the U.S."
On Wednesday, oil was trading at about US$127 per barrel. Last Thursday, it hit a new record, trading above US$135 for part of the day.
The National Energy Board is an independent government agency accountable to Parliament through the minister of natural resources. The board is responsible for regulating international and inter-provincial aspects of the oil, gas and electric utility industries.
According to the board, oil is not the only commodity with a strong future. Natural gas prices have doubled since last fall and are also expected to continue rising. The board predicts they will hover between US$11 and US$13 per million British thermal units this summer.
That could mean increased electricity costs for regions that rely on natural gas-fired electricity production such as Ontario and Alberta.
Despite the high cost of fuel, the agency believes there will be enough electricity available to meet Canada's needs throughout the summer. The possible exception, says the report, could occur during heat waves, when air conditioners are consuming significantly more power than usual.
