Canadian natural gas fell as warmer-than-normal weather in the U.S. pares demand for imported furnace fuels.
Alberta gas for April delivery fell 1.7 percent. Heating demand across the U.S. will average 59 percent below normal through March 19, according to Weather Derivatives, a forecaster based in Belton, Missouri. New York futures dropped 2.4 percent to a 10-year low.
“The weather outlook is still bearish,” said Kyle Cooper, director of research at IAF Advisors in Houston. If futures breach the 10-year intraday low of $2.231 per million British thermal units “you have only lower to go,” he said.
Alberta gas for April delivery fell 3 cents to C$1.705 a gigajoule ($1.63 per million British thermal units) as of 1:45 p.m. New York time on 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. (TRP)’s Alberta system.
Natural gas for April delivery on the New York Mercantile Exchange dropped 5.5 cents to $2.269 per million Btu, the lowest settlement since February 2002.
Spot gas at the Alliance delivery point near Chicago fell 7.1 cents, or 3.2 percent, to $2.1509 per million Btu on the Intercontinental Exchange. Alliance is an express line that 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 2.8 cents to $1.988 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 0.5 cent at $2.0981.
Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 17.1 billion cubic feet, 327 million below target.
Gas was flowing at a daily rate of 2 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 2.18 billion cubic feet.
Available capacity on TransCanada’s British Columbia system at Kingsgate was 587 million cubic feet. The system was forecast to carry 2.07 billion cubic feet today, or 78 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 3.08 billion cubic feet at 12:35 p.m.
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