Bloomberg News

Canadian Gas Rises as Snowstorm Is Forecast for U.S. Northeast

October 28, 2011

Oct. 28 (Bloomberg) -- Canadian natural gas for November delivery rose as the season’s first snowstorm was forecast in the U.S. northeast.

Alberta gas gained 5.8 percent as forecasters including Commodity Weather Group LLC in Bethesda, Maryland, predicted below-normal temperatures from Texas to Maine through the start of November. Western New York may receive at least 6 inches (15 centimeters) of snow tomorrow, while New York City may get a dusting, according to the U.S. National Weather Service.

“With the first snowfall it’s going to be in a limited area in the Northeast, but I think it’s spurring short covering,” Carl Neill, an energy consultant with Risk Management Inc. in Atlanta, said in a telephone interview. “Seasonally, this is the time of year you tend to rally, so we’ll just see if it continues. We’ve had a few of these in the past month and they’ve all quickly failed.”

November Alberta gas increased 17.75 cents to C$3.26 per gigajoule ($3.11 per million British thermal units) as of 3 p.m. New York time, according to NGX, a Canadian Internet market. The price hit a 12-month low of C$3.0525 on Oct. 12. December gas rose 16 cents to C$3.465.

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 December delivery on the New York Mercantile Exchange jumped 15.9 cents to settle at $3.923 per million Btu.

Storm Watch

A winter storm watch is in place for tomorrow from the mountains of Virginia to northeastern Maine including northern New Jersey and the lower Hudson River Valley, where as much as 10 inches of snow may fall in some areas. A hazardous weather statement posted for New York City warns of slushy snow and heavy rain.

The low temperature in New York tomorrow may be 33 degrees Fahrenheit (1 Celsius), 13 below normal, according to AccuWeather Inc. in State College, Pennsylvania. The low in Boston may be 36, 7 below normal.

Heating demand in the Northeast tomorrow may be 33 percent above normal, according to Weather Derivatives in Belton, Missouri.

About 51 percent of U.S. households use natural gas for heating, Energy Department data show.

Gas Flows

Spot gas at the Alliance delivery point near Chicago fell 5.43 cents, or 1.4 percent, to $3.8535 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 gained 4.29 cents, or 1.3 percent, to $3.4787, according to ICE.

At Malin, Oregon, where Canadian gas is traded for California markets, gas rose 0.76 cent, or 0.2 percent, to $3.5242 per million Btu.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.2 billion cubic feet, 102 million below the target.

Gas was flowing at a daily rate of 2.2 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 1.89 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 743 million cubic feet. The system was forecast to carry 1.84 billion cubic feet today, about 71 percent of its capacity of 2.58 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 2.71 billion cubic feet at 2:05 p.m. The system has low line pack and shippers must bring their accounts within tolerance for the weekend, according to a note on the Spectra website.

--With assistance from Christine Buurma in New York and Brian K. Sullivan in Boston. Editors: Charlotte Porter, Bill Banker

To contact the reporter on this story: Colin McClelland in Toronto at cmcclelland1@bloomberg.net

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


Reviving Keynes
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus