Canadian natural gas production has been on the rebound in recent days thanks to precipitation and continued cooler weather, which has helped firefighting efforts in Alberta's oil and gas country.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
Modeled Canadian gas production climbed to an estimated 17.5 Bcf/d May 26, as output edges up to its highest over the past two days since the widespread outbreak of Alberta's wildfires in early May.
After slumping to just 15.6 Bcf/d earlier this month, Canadian gas production has rebounded sharply this week but continues to trend about 1 Bcf/d, or roughly 5%, below its prior year-to-date average of around 18.5 Bcf/d, legacy IHS PointLogic data from S&P Global Commodity Insights showed.
Over the past five days, high temperatures in Calgary have dipped to the mid- to upper 60 degrees Fahrenheit, with overnight lows averaging just above 45 degrees—down from 80 F earlier this month.
Currently, just 51 active wildfires are burning in Alberta with 14 classified as out of control, data from Alberta's ArcGIS Wildfire Status dashboard showed May 26. Just over one week ago, 90 wildfires were still burning across the province. Earlier this month, over 100 separate wildfires in Alberta prompted the shut-in of gas processing plants and production in parts of the Montney, Duvernay, Deep Basin and Kaybob plays with at least seven Canadian operators announcing curtailments to their output.
In the immediate aftermath of Alberta's wildfire's wildfire outbreak, prices at the AECO hub in Alberta briefly broke above $2/MMBtu, Platts data shows. Since at least mid-May, though, prices have pulled back to the mid-$1/MMBtu range, returning to discounted levels more typical of supply hubs in western Canada.
While Canadian gas prices have seen limited impact from the Alberta wildfires this month, pipeline exports to the US have taken a hit. Net export volumes from Canada to the US dropped to just 3.9 Bcf/d May 7 before rebounding back to over 5 Bcf/d days later as some previously curtailed production was restored.
But by mid-May, some of the restored output was shut a second time, fueling another drop in outbound flows to the US, which dipped as low as 3.5 Bcf/d May 21.
On May 26, gas exports from Canada to the US were estimated at just under 4.5 Bcf/d. Month to date, exports are averaging just over 4.5 Bcf/d—down from about 300 MMcf/d compared with the April average, data from S&P Global data showed.