Bloomberg News

Canadian Natural Gas Increases on Forecast for Colder Winter

October 04, 2011

Oct. 4 (Bloomberg) -- Canadian natural gas rose as forecasters predicted a colder-than-normal winter in North America that will boost demand for the heating fuel.

Prices, which usually follow their U.S. counterparts on the New York Mercantile Exchange, gained 2.3 percent as Commodity Weather Group LLC in Bethesda, Maryland, said heating needs in November and December may rise to the highest level since 2000.

“It seems like a lot of people are getting more onside with a colder-than-average winter, but I think it’s way too early to say for sure,” Martin King, senior commodities analyst with FirstEnergy Capital Corp. in Calgary, said in a telephone interview. “I understand there’s still some stiff technical resistance at $3.60.”

Alberta gas for November delivery rose 7.5 cents to C$3.41 per gigajoule ($3.03 per million Btu) as of 3:15 p.m. New York time, while December gas gained 7 cents to C$3.685, according to NGX, a Canadian Internet market. Gas traded on the exchange is shipped to users in Canada and the U.S. and is priced on TransCanada Corp.’s Alberta system.

Gas for November delivery on the Nymex advanced 2.1 cents to settle at $3.638 per million Btu.

Heating degree days, a measure of demand for heating fuels during cold weather, are forecast to reach 11 percent higher during November and December than the 10-year average, Matt Rogers, president of Commodity Weather Group, said in a telephone interview. They may total 1,530 in November and December, he said.

Heating Demand

About 52 percent of U.S. households use natural gas for heating, according to the Energy Department.

Gas at the Alliance Pipeline delivery point near Chicago declined 0.75 cent, or 0.2 percent, to $3.653 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry about 1.5 billion cubic feet a day to the Midwest from western Canada.

At the Kingsgate point on the border of Idaho and British Columbia, gas rose 0.94 cent, or 0.3 percent, to $3.4083, according to ICE.

At Malin, Oregon, where Canadian gas is traded for California markets, gas advanced 0.47 cent to $3.4905 per million Btu.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.4 billion cubic feet, 645 million above the target, as of 2:45 p.m. New York time.

Gas Flows

Gas was flowing at a daily rate of 2.51 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 1.94 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 559 million cubic feet. The system was forecast to carry 1.53 billion cubic feet today, about 73 percent of its capacity of 2.09 billion.

The volume on Spectra Energy’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 2.8 billion cubic feet at 1:35 p.m.

--With assistance from Moming Zhou in New York. Editors: Charlotte Porter, Bill Banker

To contact the reporter on this story: Colin McClelland in Toronto at

To contact the editor responsible for this story: Dan Stets at

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