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Summer driving will be cheaper than last year: NEB

Globe and Mail Update

Calgary — Oil prices are likely to remain around $50 (U.S.) to $60 a barrel over the next few months, and drivers can expect cheaper road trips than last year, Canada's National Energy Board forecast in its summer forecast Thursday.

Falling gasoline supplies – in the U.S., inventories are below the five-year average, and dropping – are responsible for the recent increase in pump costs, but these should still remain well below the highs reached last year.

An oversupply of natural gas is likely to keep prices of that commodity low, in the range of $3.20 and $4.20 (U.S.) per thousand cubic feet, although the board warned that production cuts in both oil and gas are likely to bring higher prices in the medium to long term.

Still, for the coming summer, high inventories, especially of natural gas, are likely to keep prices depressed.

“Storage levels are almost 600 billion cubic feet higher than last year, suggesting that North American will be amply supplied with gas in the short-term,” the board said.

For electricity, the board said increases in production and transmission will likely “result in flat or slightly decreasing demand,” meaning that “aside from extreme weather conditions and unforeseen outages, there should be no supply interruptions” this summer.

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