Natural gas prices have climbed to some of their highest levels in years, with the increases expected to ripple into people’s gas bills as winter fast approaches.
A marriage of factors in North America and Europe — from summer storms to an overseas supply crunch — have contributed to sharp rise in the price of the fossil fuel.
Martin King, senior analyst at RBN Energy, said the Alberta spot price for natural gas was around $4.80 a gigajoule on Thursday morning. With the exception of a February price spike amid a nasty North American cold snap, it’s some of the highest prices he’s seen in years.
“It’s pretty astounding,” King said.
“We’re seeing seven-year highs for natural gas both in the U.S. and Canada and, on the international front, we’re seeing pretty much close to all-time highs in many markets worldwide.”
While those prices will help natural gas producers, it’ll have consumers facing higher gas bills at a time when they’re already paying more for housing, transportation and food.
“We’ll see how the spring and summer next year shape up,” King said. “But in the very short term, going into the winter, we’re all going to be facing higher natural gas bills.“
It’s part of an international story.
Natural gas is used for home heating, power and is used by appliances like stoves and gas dryers. (Kim Brunhuber/CBC)
In the U.S. futures market, the natural gas contract for October climbed to over $5 US per one million British thermal units — a level not seen since February, 2014.
Reuters reported Thursday that U.S. natural gas futures slipped as storage levels improved, but one analyst told the news service it wasn’t “enough to put a ceiling on the recent rise in prices.”
Meanwhile, the price of natural gas in Europe has risen fivefold since last year, pushing power prices across the continent to their highest in over a decade.
King said itseems like the price could potentially go a “little bit higher” into October, adding much depends on how cold things get at the start of the winter heating season.
Higher commodity prices prompted Saskatchewan’s natural gas distribution company this week to apply for an increase in the price of natural gas in the province.
SaskEnergy said the market price for natural gas has doubled since the Crown decreased its prices back in 2019.
It pointed to increased natural gas demand for power generation coupled with higher liquefied natural gas (LNG) exports are contributing to increased commodity prices.
In Ontario, Enbridge Gas has applied to the regulator for an increase ranging from six to eight per cent in the rates paid by its 3.8 million customers. On an annualized basis, that represents about $60 to $80 more for the average residential customer, the company said. If approved, it would take effect on Oct. 1.
Spokesperson Andrea Stass said that through the pandemic, in 2020 and early in 2021, demand for natural gas declined and prices dipped to some of their lowest points “in many years.” The company decreased rates in July by two per cent, she said.
“We’re now at a point where our economy is recovering and demand is increasing,” Stass added.
Why
There are several factors running through the natural gas market these days impacting prices globally.
In Europe, stockpiles of natural gas are low, the result of a witch’s brew of issues that include an unusually cold winter and maintenance work at Norwegian facilities. Power prices on the continent are “skyrocketing.”
With gas prices soaring overseas, the United States is shipping as much liquefied natural gas as it possibly can from North America, said Jeremy McCrea, director of Raymond James Energy Research in Calgary.
“It’s actually draining our gas inventories quicker than … I think a lot of guys have expected,” he said.
He also noted that the slow down that’s occurred in oil well drilling in North America has had an impact because many of those wells also produced associated natural gas.
“If you look at the one-year outlook for gas prices, you’re looking at $4 to $4.25 prices here,” McCrea said, referring to the Alberta market, “which are some of the highest levels that we’ve seen since 2014.“
“We’ll see how the spring and summer next year shape up,” said Martin King, senior analyst at RBN Energy. “But in the very short term, going into the winter, we’re all going to be facing higher natural gas bills.” (Martin King)
Hurricane Ida also had an impact on U.S. gas production.
Higher natural gas prices should help lift provincial revenues in Alberta. It’s also expected to help Canadian gas producers that slashed operating costs amid much lower prices.
“They are very slowly and very cautiously increasing their capital spending programs,” said RBN Energy’s King.
“By nature, it’s a very cyclical industry. And just as soon as we’ve seen these strong gas prices, a warm winter could wipe out all the gains that we’ve seen very, very quickly.”
Darren Gee, president of Calgary-based Peyto Exploration & Development, said current pricing is good for the company, generating more cash flow from its natural gas production.
“We’d love to say that this [pricing] translates into then more drilling and more investment in Alberta and more jobs for Albertans,” Gee said Tuesday.
“But the challenging part is that we still … have limited amount of egress in western Canada. We can only get so much gas out to market, whether that’s to the U.S. market or to the global market.”
He said it’s also been difficult for the industry to get workers.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
