Connect with us
[the_ad id="89560"]

Business

2025 Energy Outlook: Steering Through Recovery and Policy Shifts

Published

7 minute read

From EnergyNow.ca

By Leonard Herchen & Yuchen Wang of GLJ

Their long-term real price forecast projects WTI at USD $74.00 per barrel and Henry Hub natural gas at USD $4.00 per MMBtu in 2025 dollars, signaling expectations of market stabilization and sustained global demand.

The energy markets in 2025 are undergoing transformative structural changes, highlighted by the operational launch of key infrastructure projects such as LNG Canada. This development significantly enhances Canada’s ability to meet rising global LNG demand while alleviating long-standing supply bottlenecks. At the same time, economic recovery across major markets remains uneven, shaping varied trends in energy demand and production activity.

Geopolitical dynamics are poised to redefine the competitive landscape, with the return of a Trump-led U.S. administration introducing potential shifts in trade policies, regulatory frameworks, and relationships with leading energy-producing nations. These changes, coupled with climate policy advancements and an accelerated global transition toward renewable energy, present additional complexities for the oil and gas sector.

Amid these uncertainties, GLJ’s analysts express confidence in the resilience of market fundamentals. Their long-term real price forecast projects WTI at USD $74.00 per barrel and Henry Hub natural gas at USD $4.00 per MMBtu in 2025 dollars, signaling expectations of market stabilization and sustained global demand.

Oil Prices

The oil market in 2025 reflects a delicate balance between supply and demand. During Q4 2024, WTI prices remained stable, fluctuating between $69 and $73 per barrel. This stability highlights the market’s resilience, even in the face of a slower global economic recovery and geopolitical challenges, including weaker demand in regions like China and increased production in North America.

Geopolitical risks remain pivotal, with ongoing tensions in the Middle East and sanctions on oil-exporting nations such as Iran and Venezuela threatening supply disruptions. While OPEC+ production cuts continue to provide vital support to prices by tightening global supply, these efforts are partially offset by the rising output of non-OPEC producers, notably in the U.S. and Canada.

The Trans Mountain Expansion (TMX) project is reshaping the pricing dynamics of WCS crude relative to WTI. By increasing export capacity to the West Coast, TMX has created conditions for a sustained narrowing of the WCS-WTI differential, moving away from seasonal fluctuations.

The return of a Trump-led U.S. administration introduces additional challenges. Deregulation policies aimed at boosting domestic oil production may exert downward pressure on prices, while potential trade tariffs and revised international agreements could further complicate global oil flows.

In this dynamic environment, GLJ forecasts WTI to average $71.25 per barrel and Brent $75.25 per barrel in 2025. These projections reflect robust long-term fundamentals, including sustained global demand and ongoing efforts to manage supply dynamics, emphasizing the market’s resilience despite near-term uncertainties.

Natural Gas Prices

In 2025, GLJ’s forecast suggests Henry Hub prices will average $3.20 per MMBtu, supported by steady domestic demand, seasonal winter peaks, and robust LNG exports. U.S. natural gas continues to play a critical role globally, ensuring supply security for key markets in Europe and Asia. The combination of growing industrial use, power generation demand, and stable production levels provides a solid foundation for price stability.

For the Canadian market, GLJ projects AECO natural gas prices to average $2.05 per MMBtu in 2025, representing a recovery from the lows of 2024. This improvement is attributed to easing regional oversupply and stabilizing demand. However, challenges persist, as production continues to outpace infrastructure expansion, prompting a downward adjustment of GLJ’s long-term AECO price forecast by $0.40 per MMBtu. The ramp-up of LNG Canada’s operations is expected to progressively enhance market dynamics and address these challenges.

On a global scale, LNG benchmarks such as NBP, TTF, and JKM have remained relatively stable, supported by high storage levels in Europe and balanced supply-demand conditions. European suppliers have effectively managed storage drawdowns, ensuring sufficient reserves for winter. Nevertheless, these benchmarks remain susceptible to market volatility driven by geopolitical uncertainties.

The CAD/USD Exchange Rate

The Canadian dollar experienced sharp depreciation during the last quarter of 2024, with the CAD/USD exchange rate falling below 0.70 USD. Economists have attributed this decline to the strength of the U.S. economy and its currency, the widening gap between the Bank of Canada and the U.S. Federal Reserve’s lending rates, as well as tariff threats and a political crisis in Ottawa. These factors have created a favorable environment for the U.S. dollar, putting downward pressure on the Canadian dollar.

Looking ahead to 2025, GLJ forecasts a CAD/USD exchange rate averaging 0.705 USD, underpinned by steady oil and gas revenues and enhanced export capacity from major projects such as LNG Canada and the TMX and eventual resolution of internal political issues and return to normalcy in US tariff policy.

Nevertheless, the outlook for the Canadian dollar remains uncertain, shaped by global economic recovery—particularly in China—and U.S. policy decisions under the Trump administration. While near-term challenges persist, Canada’s resource-driven economy and strategic energy export position provide a degree of resilience. In the absence of significant economic or geopolitical disruptions, GLJ projects the CAD/USD exchange rate to stabilize around 0.75 USD over the long term.

In 2025, GLJ expanded its database to include forecasts for Colombia Vasconia and Castilla Crude, as well as lithium prices, reflecting the increasing focus on diverse energy and resource markets. The addition of lithium forecasts aligns with the growing global emphasis on energy transition minerals critical for electric vehicles and battery storage solutions. A separate blog, set to be published next week on the GLJ website, will explore the lithium price forecast in greater depth, offering a detailed analysis and strategic implications for the energy sector.


GLJ’s forecast values for key benchmarks is as follows:

 

Business

It Took Trump To Get Canada Serious About Free Trade With Itself

Published on

From the  Frontier Centre for Public Policy

By Lee Harding

Trump’s protectionism has jolted Canada into finally beginning to tear down interprovincial trade barriers

The threat of Donald Trump’s tariffs and the potential collapse of North American free trade have prompted Canada to look inward. With international trade under pressure, the country is—at last—taking meaningful steps to improve trade within its borders.

Canada’s Constitution gives provinces control over many key economic levers. While Ottawa manages international trade, the provinces regulate licensing, certification and procurement rules. These fragmented regulations have long acted as internal trade barriers, forcing companies and professionals to navigate duplicate approval processes when operating across provincial lines.

These restrictions increase costs, delay projects and limit job opportunities for businesses and workers. For consumers, they mean higher prices and fewer choices. Economists estimate that these barriers hold back up to $200 billion of Canada’s economy annually, roughly eight per cent of the country’s GDP.

Ironically, it wasn’t until after Canada signed the North American Free Trade Agreement that it began to address domestic trade restrictions. In 1994, the first ministers signed the Agreement on Internal Trade (AIT), committing to equal treatment of bidders on provincial and municipal contracts. Subsequent regional agreements, such as Alberta and British Columbia’s Trade, Investment and Labour Mobility Agreement in 2007, and the New West Partnership that followed, expanded cooperation to include broader credential recognition and enforceable dispute resolution.

In 2017, the Canadian Free Trade Agreement (CFTA) replaced the AIT to streamline trade among provinces and territories. While more ambitious in scope, the CFTA’s effectiveness has been limited by a patchwork of exemptions and slow implementation.

Now, however, Trump’s protectionism has reignited momentum to fix the problem. In recent months, provincial and territorial labour market ministers met with their federal counterpart to strengthen the CFTA. Their goal: to remove longstanding barriers and unlock the full potential of Canada’s internal market.

According to a March 5 CFTA press release, five governments have agreed to eliminate 40 exemptions they previously claimed for themselves. A June 1 deadline has been set to produce an action plan for nationwide mutual recognition of professional credentials. Ministers are also working on the mutual recognition of consumer goods, excluding food, so that if a product is approved for sale in one province, it can be sold anywhere in Canada without added red tape.

Ontario Premier Doug Ford has signalled that his province won’t wait for consensus. Ontario is dropping all its CFTA exemptions, allowing medical professionals to begin practising while awaiting registration with provincial regulators.

Ontario has partnered with Nova Scotia and New Brunswick to implement mutual recognition of goods, services and registered workers. These provinces have also enabled direct-to-consumer alcohol sales, letting individuals purchase alcohol directly from producers for personal consumption.

A joint CFTA statement says other provinces intend to follow suit, except Prince Edward Island and Newfoundland and Labrador.

These developments are long overdue. Confederation happened more than 150 years ago, and prohibition ended more than a century ago, yet Canadians still face barriers when trying to buy a bottle of wine from another province or find work across a provincial line.

Perhaps now, Canada will finally become the economic union it was always meant to be. Few would thank Donald Trump, but without his tariffs, this renewed urgency to break down internal trade barriers might never have emerged.

Lee Harding is a research fellow with the Frontier Centre for Public Policy.

Continue Reading

2025 Federal Election

Carney’s budget is worse than Trudeau’s

Published on

By Gage Haubrich

Liberal Leader Mark Carney is planning to borrow more money than former prime minister Justin Trudeau.

That’s an odd plan for a former banker because the federal government is already spending more on debt interest payments than it spends on health-care transfers to the provinces.

Let’s take a deeper look at Carney’s plan.

Carney says that his government would “spend less, invest more.”

At first glance, that might sound better than the previous decade of massive deficits and increasing debt, but does that sound like a real change?

Because if you open a thesaurus, you’ll find that “spend” and “invest” are synonyms, they mean the same thing.

And Carney’s platform shows it. Carney plans to increase government spending by $130 billion. He plans to increase the federal debt by $225 billion over the next four years. That’s about $100 billion more than Trudeau was planning borrow over the same period, according to the most recent Fall Economic Statement.

Carney is planning to waste $5.6 billion more on debt interest charges than Trudeau. Interest charges already cost taxpayers more than $1 billion per week.

The platform claims that Carney will run a budget surplus in 2028, but that’s nonsense. Because once you include the $48 billion of spending in Carney’s “capital” budget, the tiny surplus disappears, and taxpayers are stuck with more debt.

And that’s despite planning to take even more money from Canadians in years ahead. Carney’s platform shows that his carbon tariff, another carbon tax on Canadians, will cost taxpayers $500 million.

The bottom line is that government spending, no matter what pile it is put into, is just government spending. And when the government spends too much, that means it must borrow more money, and taxpayers have to pay the interest payments on that irresponsible borrowing.

Canadians don’t even believe that Carney can follow through on his watered-down plan. A majority of Canadians are skeptical that Carney will balance the operational budget in three years, according to Leger polling.

All Carney’s plan means for Canadians is more borrowing and higher debt. And taxpayers can’t afford anymore debt.

When the Liberals were first elected the debt was $616 billion. It’s projected to reach almost $1.3 trillion by the end of the year, that means the debt has more than doubled in the last decade.

Every single Canadian’s individual share of the federal debt averages about $30,000.

Interest charges on the debt are costing taxpayers $53.7 billion this year. That’s more than the government takes in GST from Canadians. That means every time you go to the grocery store, fill up your car with gas, or buy almost anything else, all that federal sales tax you pay isn’t being used for anything but paying for the government’s poor financial decisions.

Creative accounting is not the solution to get the government’s fiscal house in order. It’s spending cuts. And Carney even says this.

“The federal government has been spending too much,” said Carney. He then went on to acknowledge the huge spending growth of the government over the last decade and the ballooning of the federal bureaucracy. A serious plan to balance the budget and pay down debt includes cutting spending and slashing bureaucracy.

But the Conservatives aren’t off the hook here either. Conservative Leader Pierre Poilievre has said that he will balance the budget “as soon as possible,” but hasn’t told taxpayers when that is.

More debt today means higher taxes tomorrow. That’s because every dollar borrowed by the federal government must be paid back plus interest. Any party that says it wants to make life more affordable also needs a plan to start paying back the debt.

Taxpayers need a government that will commit to balancing the budget for real and start paying back debt, not one that is continuing to pile on debt and waste billions on interest charges.

Continue Reading

Trending

X