The Canadian Press

A prominent Canadian think-tank is predicting a rebound in natural gas profits in the coming year despite a dip in production.

The Conference Board of Canada says gas prices have nearly doubled in the past six months and are expected to be 36 per cent higher this year than they were in 2009.

The board says gas prices will average $5.44 per thousand cubic feet, bringing pre-tax profits for the year to about $5.9 billion and restoring them to near the levels experienced in 2008, when energy prices peaked then collapsed.

The economic downturn sapped strength from the gas extraction industry in 2009, dragging profits down 65 per cent for the year.

The board says the price increase will be offset by a two per cent decline in production, due to high inventory levels and the residual effects of the recession.

The board says the relatively moderate pricing is expected to dampen drilling activity in 2010.