The cash price of Western Canada’s natural gas price marker of AECO continues to struggle at levels well below C$2/GJ ($1.46/MMBtu), despite what has been winter’s icy cold grip descending upon most of North America in the past 10 days. With the headline NYMEX-CME prompt month natural gas contract price having settled above $4/MMBtu on January 15, and cash prices at nearly all gas trading hubs at or well above $4/MMBtu – and many in double digits – one might think that Western Canada’s gas prices would be along for the ride at much higher price levels. Nothing of the sort.
With only a few days in January to date that have traded a little north of $C2/GJ, the average cash price for AECO this month (red column in chart below) has been an underwhelming C$1.89/GJ ($1.39/MMBtu). This is only marginally ahead of the 2019 average (green column) of C$1.82/GJ ($1.45/MMBtu) and not too distant from the previous January average low (purple column) of C$1.49/GJ ($1.09/MMBtu) in 1998. Should the average price-to-date in January hold near the current level, this would rank as the tenth lowest average price for the month in the past 40 years.
