Bloomberg News

Canada Natural Gas Falls as Mild U.S. Weather Pares Furnace Use

December 20, 2011

Dec. 19 (Bloomberg) -- Canadian natural gas fell as mild weather in the U.S., where most of the nation’s gas output is consumed, pares demand for heating fuels.

Alberta gas dropped 2.2 percent. Weather Derivatives of Belton, Missouri, said heating demand across the U.S. will trail normal by 20 percent through Dec. 26. New York’s high Dec. 21 may touch 53 degrees Fahrenheit (12 Celsius), 12 above normal, according to AccuWeather Inc. of State College, Pennsylvania.

“It’s balmy across the country and the forecasts are warm all the way to January,” said Kyle Cooper, director of research at IAF Advisors in Houston.

Alberta gas for January delivery slipped 6.25 cents to C$2.8225 a gigajoule ($2.57 per million British thermal units) as of 3:25 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 priced on TransCanada Corp.’s Alberta system. NGX Alberta gas has fallen 23 percent this year.

Gas for January delivery fell 3.1 cents to settle at $3.096 per million Btu on the New York Mercantile Exchange. The futures are down 30 percent this year.

Spot gas at the Alliance delivery point near Chicago rose 7 cents, or 2.2 percent, to $3.2044 per million Btu on the Intercontinental Exchange. Alliance, an express line, can carry 1.5 billion cubic feet a day to the Midwest from western Canada.

Spot Prices

At the Kingsgate point on the border of Idaho and British Columbia, gas fell 12.66 cents, or 3.9 percent, to $3.0965, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 14.55 cents, or 4.3 percent, to $3.2244 per million Btu.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.8 billion cubic feet, 55 million below its target.

Gas was flowing at a daily rate of 2.45 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 1.78 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 679 million cubic feet. The system was forecast to carry 1.97 billion cubic feet today, about 74 percent of its capacity of 2.65 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 2.9 billion cubic feet at 2:20 p.m.

--Editors: Charlotte Porter, Richard Stubbe

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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