Bloomberg News

Canadian Natural Gas Advances as Buyers Boost Stocks for Winter

October 19, 2011

Oct. 19 (Bloomberg) -- Canadian natural gas rose after a 4 percent drop in New York futures yesterday spurred buying among traders with winter storage left to fill.

Alberta gas rose 1.4 percent after November futures plunged 13.5 cents per million British thermal units in New York. Price declines in times of low demand allow traders with storage to stow the fuel and sell it during winter.

“Gas sold off pretty hard yesterday,” said Martin King, senior commodities analyst with FirstEnergy Capital Corp. in Calgary. “It looks like a technical bounce. People are still pretty bearish on gas.”

Alberta gas for November delivery rose 4.5 cents to C$3.215 per gigajoule ($2.99 per million Btu) as of 3:55 p.m. New York time, 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 New York Mercantile Exchange rose 3.3 cents to settle at $3.586 per million Btu.

Gas at the Alliance delivery point rose 2.12 cents to $3.8024 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 slipped 2.33 cents to $3.4486, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 1.53 cents to $3.5107 per million Btu.

Regional Flows

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.2 billion cubic feet, 300 million below the target.

Gas was flowing at a daily rate of 2.73 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 1.83 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.39 billion cubic feet. The system was forecast to carry 1.37 billion cubic feet today, about 50 percent of its capacity of 2.76 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 2.91 billion cubic feet at 2:50 p.m.

--Editors: Bill Banker, Charlotte Porter

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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