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by Stockwatch Business Reporter

West Texas Intermediate crude for January delivery gained 67 cents to $57.36 on the New York Merc, while Brent for February gained $1.20 to $63.40 (all figures in this para U.S.). Western Canadian Select traded at a discount of $17.30 to WTI ($40.06), unchanged. Natural gas for January added one cent to close at $2.77. The TSX energy index closed up 1.19 points to 186.83.

Poor old Advantage Oil & Gas Ltd. (AAV), an Alberta Montney gas producer, rallied two cents today to $5.11 on 2.83 million shares. Unfortunately, it is down from about $7.25 in the past month. Over the same period, AECO gas prices (the benchmark in Alberta) have fallen below $1.80 per gigajoule from above $2.40 per gigajoule. Advantage Oil's total production comprises 96 per cent gas, and although its exposure to AECO prices for this winter is only 9 per cent, it expects this proportion to increase to 43 per cent next year and then to 54 per cent in 2019, making it susceptible to gas price volatility. Advantage Oil's main advantage is its low cash cost, which was 73 cents per thousand cubic feet of gas equivalent in the third quarter. In comparison, fellow Alberta gas producer Bonavista Energy Corp. (BNP: $1.92) had third quarter cash costs of about $1.45 per thousand cubic feet. Like Advantage Oil, Bonavista is suffering from gas price volatility and has fallen to today's $1.92 from about $2.90 a month ago.

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