Bloomberg News

Canadian Natural Gas Falls After Inventory Drop Misses Estimates

February 24, 2012

Feb. 23 (Bloomberg) -- Canadian natural gas fell after a report showed U.S. inventories declined less than analysts estimated last week.

Alberta gas dropped 2.7 percent, reversing gains prior to the Energy Department report. U.S. stockpiles fell 166 billion cubic feet to 2.595 trillion in the week ended Feb. 17, 40 percent above the five-year average, the Energy Department said. Inventories had been expected to fall 170 billion cubic feet, the median of 24 analyst estimates compiled by Bloomberg.

“We’re looking at a very large year-on-five-year surplus,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “Looking ahead, we’re likely to see a below-average storage withdrawal for this week.”

Alberta gas for March delivery declined 5.5 cents to C$2.0125 a gigajoule ($1.91 per million British thermal units) at 12:55 p.m. New York time on NGX, a Canadian Internet market. NGX gas has dropped 30 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 fell 5 cents to $2.593 per million Btu at 1 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, 71 million below target.

Pipeline Flows

Gas was flowing at a daily rate of 2.69 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 2.14 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 686 million cubic feet. The system was forecast to carry 1.97 billion cubic feet today, or 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 3.07 billion cubic feet at 11:50 a.m.

--Editors: Richard Stubbe, Charlotte Porter

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net


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