Bloomberg News

Canadian Natural Gas Rises After Report of U.S. Stockpile Drop

February 17, 2012

Feb. 16 (Bloomberg) -- Canadian natural gas advanced after a U.S. government report showed that stockpiles of the fuel fell more than analysts estimated.

Alberta gas rose 3.4 percent as inventories dropped 127 billion cubic feet to 2.761 trillion last week, according to the Energy Department. Analysts had forecast a decline of 120 billion, the median of 24 estimates compiled by Bloomberg. Stockpiles were 38.3 percent above the five-year average in the week ended Feb. 10, the report showed.

“Whenever you have a number that deviates from the estimates and indicates some bullishness, the market sees there may be some support out there,” said Eric Bickel, a natural-gas analyst with Summit Energy Services in Louisville, Kentucky.

Alberta gas for March delivery gained 6.75 cents to C$2.045 a gigajoule ($1.95 per million British thermal units) at 2:50 p.m. New York time on NGX, a Canadian Internet market. NGX gas has lost 29 percent this year.

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

Natural gas for March delivery on the New York Mercantile Exchange rose 14.2 cents, or 5.9 percent, to settle at $2.567 per million Btu.

Gas for prompt delivery fell amid forecasts of mild weather across the U.S. Demand for heating will lag normal by 18 percent through Feb. 23, according to Belton, Missouri-based forecaster Weather Derivatives. Chicago’s low will be 33 degrees Fahrenheit (1 Celsius) tomorrow, 11 degrees higher than normal, State College, Pennsylvania-based AccuWeather Inc. said.

Spot Prices

Spot gas at the Alliance delivery point near Chicago dropped 7.75 cents, or 2.9 percent, to $2.625 per million Btu on the Intercontinental Exchange. Alliance, an express line, can carry 1.5 billion cubic feet a day from western Canada.

At the Kingsgate point on the border of Idaho and British Columbia, gas slipped 7.12 cents, or 2.9 percent, to $2.4169. At Malin, Oregon, where Canadian gas is traded for California markets, gas declined 8.29 cents, or 3.2 percent, to $2.5319.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.8 billion cubic feet, 12 million below target.

Gas was flowing at a daily rate of 2.41 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 2.1 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 417 million cubic feet. The system was forecast to carry 2.03 billion cubic feet today, or 83 percent of its capacity of 2.44 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 1:35 p.m.

--Editors: Bill Banker, David Marino

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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