Feb. 22 (Bloomberg) -- Canadian natural gas fell as a glut of the fuel in U.S. storage pared the need for imports.
Alberta gas dropped 1.1 percent. U.S. gas stockpiles probably declined 167 billion cubic feet last week, the median of 15 analyst estimates compiled by Bloomberg. That would leave 2.6 trillion cubic feet of gas in storage, 40 percent more than the five-year average.
“The weather is so warm and there’s so much gas in storage it’s hard to get bullish,” said Carl Neill, a consultant with Risk Management Inc. in Atlanta. “The only way prices are going up is through more production cuts.”
Producers like Encana Corp. and Chesapeake Energy Corp. have said they plan to cut output because of low gas prices. The number of rigs drilling for gas in the U.S. slipped last week to 716, the lowest level since Oct. 2, 2009, according to data compiled by Baker Hughes Inc.
Alberta gas for March delivery declined 2.25 cents to C$2.0525 a gigajoule ($1.95 per million British thermal units) at 2:15 p.m. New York time on NGX, a Canadian Internet market. NGX gas has dropped 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 0.2 cents to $2.628 per million Btu as of 1:56 p.m.
Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.8 billion cubic feet, 16 million above target.
Gas was flowing at a daily rate of 2.64 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 2.13 billion cubic feet.
Available capacity on TransCanada’s British Columbia system at Kingsgate was 565 million cubic feet. The system was forecast to carry 1.88 billion cubic feet today, or 77 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 3.05 billion cubic feet at 12:50 p.m.
--Editors: Charlotte Porter, Richard Stubbe
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