Bloomberg News

Canadian Natural Gas Falls on Forecasts for Higher Temperatures

November 20, 2011

Nov. 18 (Bloomberg) -- Canadian natural gas for December delivery fell on record U.S. stockpiles and forecasts for warm weather across most of America, the largest consumer of the heating fuel.

Alberta gas declined 3.5 percent after the U.S. Energy Department reported inventories rose to 3.85 trillion cubic feet for the week ended Nov. 11. MDA EarthSat Weather of Gaithersburg, Maryland, forecast that much of North America except the U.S. South and West will have temperatures 3 to 14 degrees Fahrenheit (2 to 8 Celsius) above average from Nov. 23 through Nov. 27.

“It’s record high inventory in the U.S. and warm weather,” Peter Linder, president of the DeltaOne Energy Fund in Calgary, said in a telephone interview. “The market is waiting for winter.”

Alberta gas for December decreased 11.25 cents to C$3.0875 per gigajoule ($2.85 per million British thermal units) as of 3:15 p.m. New York time, according to NGX, a Canadian Internet market. January gas dropped 11.25 cents to C$3.145.

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 fell 9.4 cents to settle at $3.316 per million Btu.

Heating Demand

Heating demand across the U.S. will be 20 percent below normal until Nov. 25, according to Weather Derivatives. New York’s high may reach 60 degrees Fahrenheit Nov. 20, 8 more than normal, according to AccuWeather Inc.

Spot gas at the Alliance delivery point near Chicago dropped 9.27 cents to $3.312 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 6.19 cents to $3.4935, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas fell 1.02 cents to $3.4629 per million Btu.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was at 16.3 billion cubic feet.

Gas was flowing at a daily rate of 1.87 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 2.03 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.15 billion cubic feet. The system was forecast to carry 1.57 billion cubic feet today, about 58 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 2.75 billion cubic feet at 2:05 p.m. The system is headed into low linepack and shippers were asked to trend their accounts toward zero, according to a note on the company website.

--Editors: Charlotte Porter, Richard Stubbe

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


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus