Canadian regulator sees $50-$75 oil this winter

Thu Oct 30, 2008 2:57pm EDT
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Global economic turmoil and falling demand should keep oil, gas and electricity prices in check in Canada this winter, the country's energy regulator predicted on Thursday.

The National Energy Board, in its short-term energy outlook, also predicted supplies should be adequate across the country.

The NEB said crude oil should average between $50 and $75 a barrel, with shaky economic conditions around the world overshadowing efforts by OPEC to support prices with supply cuts.

That is a far cry from the record price above $147 a barrel set in July. U.S. benchmark crude fell 2 percent to $65.96 a barrel on Thursday.

Whether oil is at the upper or lower end of the forecast range depends largely on how successful the world's central bankers are at calming skittish markets, NEB oil analyst Christian Rankin told reporters.

"While there is consensus that we're in the midst of a global economic slowdown, perhaps on the brink of recession globally, there is no consensus around how long the recession or slowdown will be and how deep it will be," Rankin said.

At an emergency meeting earlier this month, members of the Organization of the Petroleum Exporting Countries agreed to cut production by 1.5 million barrels a day, but the move failed to lift prices. The group meets again in December.

Natural gas prices are forecast to range between $6 and $9 per million British thermal units, the board said. The North American industry begins the heating season Saturday with ample inventories and slipping demand, the board said.   Continued...