After a dismal year, both crude oil and natural gas ended 2016 with prices reaching the highest levels of the year.
During the month, producers benefited from an agreement among members of the Organization of Petroleum Exporting Countries to curtail production.
Net Energy Inc. Western Canada Select (WCS) near month prices gained 21.7% to US$37.28 per barrel (bbl) for the month from $30.63 a bbl in November and were up nearly 57% from $23.77 a bbl in December 2015. However, prices for the year averaging $29.66 a bbl were down 16.6% from the average Net Energy WCS price of $35.56 in 2015 and were the lowest since the DOB began tracking Net Energy prices in 2011.
Net Energy Sweet averaged $48.37 per bbl in December, up 15.8% from $41.78 a bbl in November and 43% from $33.81 a bbl a year earlier. Prices for the year averaged $40.26 a bbl compared to $45.08 per bbl in 2015.
Net Energy Syncrude prices also improved in December, gaining 16.5% to $51.12 a bbl from $43.89 per bbl the previous month. The monthly price was also the highest since June 2016 when Syncrude fetched an average of $51.52 a bbl as production was gradually brought back on in the wake of the Fort McMurray wildfire.
Net Energy Syncrude prices averaged $44.01 per bbl in 2016, down from $48.82 a bbl the previous year.
On the natural gas side, AECO spot gas prices averaged $3.23 a gigajoule in December, up nearly 22% from $2.65 per gigajoule in November and 47.5% from the December 2015 average of $2.19 per gigajoule. However, the 2016 average price of $2.06 per gigajoule was the lowest in at least 15 years, down nearly 20% from $2.57 per gigajoule in 2015 as stronger second-half prices (including a fourth-quarter average of $2.95 a gigajoule) weren’t enough to offset first-half 2016 prices averaging $1.55 per gigajoule.
On the New York Mercantile Exchange, natural gas futures prices were up 24% to US3.58 per mmBtu from $2.88 per mmBtu in November as cold weather drew down gas in storage. Prices also were up 75.5% from the December 2015 average of $2.04 per mmBtu when growing shale gas volumes combined with milder than average temperatures resulted in brimming storage inventories.
NYMEX gas prices averaged $3.18 per mmBtu in the fourth quarter of 2016, climbing throughout the year from the first quarter low of $1.99 per mmBtu.
Gas fetched an average of $2.56 per mmBtu in 2016 compared to $2.64 per mmBtu in 2015.
