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Sproule Price Forecast

Every month, Sproule prepares commodity price forecasts for the oil and gas market. The forecast reflects Sproule’s short and long-term views of key global and regional oil and gas commodity price markers and relies on Sproule’s proprietary models, analysis and insights.

March 31, 2018

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Disclaimer: Prices and forecasts are subject to change at the discretion of Sproule. Read More

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The following changes were made from the February 28, 2018 Sproule forecast

Brent and WTI
 

 

 

UK Brent (USD/BBL)

WTI (USD/BBL)

Feb 28, 2018 Forecast

March 31, 2018 Forecast

Feb 28, 2018 Forecast

March 31, 2018 Forecast

2018

58.00

62.00

55.00

58.00

Sproule has adjusted our Brent and WTI 2018 forecasts this month to 62USD/bbl and 58USD/bbl respectively. The industry has enjoyed strong crude pricing in Q1 relative to 2017, bolstered by decreasing inventory numbers and strong demand. However, we still expect significant supply growth from US LTO will level off WTI and Brent pricing gains through the remainder of 2018.

Canadian Heavy Oil Differentials
 

 

Canadian Heavy Oil Differentials to WTI (USD/bbl)

 

Koch Heavy

WCS

Bow River Hardisty

Cold Lake Blend

 

Feb 28, 2018 Forecast

March 31, 2018 Forecast

Feb 28, 2018 Forecast

March 31, 2018 Forecast

Feb 28, 2018 Forecast

March 31, 2018 Forecast

Feb 28, 2018 Forecast

March 31, 2018 Forecast

2018

-18.81

-22.56

-14.67

-18.20

-14.16

-18.75

-16.74

-20.38

We are widening our Canadian Heavy Oil to WTI differentials for the remainder of 2018 due to increased Canadian heavy oil production combined with Keystone operating below maximum capacity and producers relying on the more expensive rail to move their barrels.  

Henry Hub, AECO to Henry Hub Differential
 

 

Henry Hub (USD/MMBtu)

AECO – Henry Hub Differential (USD/MMBtu)

AECO (CAD/MMBtu)

 

Feb 28, 2018 Forecast

March 31, 2018 Forecast

Feb 28,  

2018   Forecast

March 31, 2018 Forecast

Feb 28, 2018 Forecast

March 31, 2018 Forecast

2018

3.25

3.00

-1.00

-1.30

2.85

2.15

2019

3.50

3.25

-0.95

-1.20

3.11

2.50

2020

4.00

3.75

-0.90

-1.10

3.65

3.12

2021

4.08

3.83

-0.85

-1.00

3.80

3.32

2022

4.16

3.90

-0.80

-0.80

3.95

3.65

Sproule has reduced our Henry Hub outlook slightly, forecasting 3.75USD/MMBTU by 2020. Despite material increases in demand driven by increasing US LNG export capacity, we expect strong supply will dampen upward pressure on prices. At AECO, we are forecasting wider differentials than previously anticipated. Increased Canadian gas supply and lack of market access continue to weaken natural gas pricing in Western Canada.

National Balancing Point
 

 

NBP (£/Mmbtu)

 

Feb 28, 2018 Forecast

March 31, 2018 Forecast

2018

4.50

4.75

2019

4.50

5.00

2020

5.00

5.15

Overseas, we are expecting gas pricing at NBP to strengthen over the forecast period, driven by increasing Asian LNG demand and rising Brent pricing.