Canadian natgas producers cut output amid record low prices

Core Viewpoint - Natural gas producers in Western Canada are significantly reducing output to address a supply glut that has driven prices into record negative territory, with daily spot prices at the Alberta Energy Company (AECO) storage hub averaging minus 5 cents per million British thermal units [1][2] Group 1: Price Trends - Daily spot prices at AECO reached record lows of minus 18 cents per million British thermal units this week, with an average of $1.03 per mmBtu so far in 2025 [2] - Analysts predict that prices will remain under pressure due to pipeline congestion caused by increased output from Alberta and British Columbia producers, which has not yet been absorbed by a new liquefied natural gas export terminal [3] Group 2: Production Adjustments - Negative prices are leading to temporary wellhead shut-ins, with some reductions in gas supplies expected to last until the end of the month [4] - Advantage Energy has strategically reduced dry gas output in late 2024 and early 2025 due to low gas prices, with the current shut-ins being the most aggressive the company has undertaken [5] Group 3: Market Conditions - The Western Canadian natural gas market has not recovered from prolonged weakness due to oversupply and warmer winters, which have decreased home heating demand [5] - Gas storage levels in Western Canada remain at last year's record highs, partly due to rising output from producers anticipating increased demand from the LNG Canada plant, which has not yet alleviated the supply glut [6] - Maintenance on TC Energy's NGTL system and Great Lakes Gas Transmission system has created bottlenecks, further trapping supply in Alberta [7]