Bloomberg News

Canadian Natural Gas Rises on Size of U.S. Inventory Increase

November 18, 2011

Nov. 17 (Bloomberg) -- Canadian natural gas for December delivery rose after U.S. stockpiles increased by less than analysts expected.

Alberta gas gained 1.9 percent following the U.S. Energy Department report that inventories for the week ended Nov. 11 grew by 19 billion cubic feet, compared with the 27 billion forecast by estimates compiled by Bloomberg. Stockpiles rose to 3.85 trillion cubic feet, surpassing the record set last year of 3.84 trillion.

“It was a little lower than people thought and you got a little short-covering spurt,” Carl Neill, an energy consultant with Risk Management Inc. in Atlanta, said in a telephone interview.

Alberta gas for December increased 6 cents to C$3.21 per gigajoule ($2.96 per million British thermal units) as of 3:35 p.m. New York time, according to NGX, a Canadian Internet market. January gas gained 5.75 cents to C$3.26.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp.’s Alberta system.

Gas for December delivery on the New York Mercantile Exchange rose 6.6 cents to settle at $3.41 per million Btu.

Heating demand across the U.S. will be 12 percent below normal until Nov. 24, according to Weather Derivatives. New York’s high may reach 61 degrees Fahrenheit (16 Celsius) Nov. 20, 9 more than normal, according to AccuWeather Inc.

Chicago Price

Spot gas at the Alliance delivery point near Chicago dropped 1.82 cents to $3.4047 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 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 0.6 cent to $3.4316, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas fell 0.95 cent to $3.4731 per million Btu.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was at 16.4 billion cubic feet.

Gas was flowing at a daily rate of 1.77 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 1.99 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.26 billion cubic feet. The system was forecast to carry 1.46 billion cubic feet today, about 54 percent of its capacity of 2.72 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 2.81 billion cubic feet at 2:50 p.m.

--With assistance from Asjylyn Loder in New York. Editors: Bill Banker, Charlotte Porter

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


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