Bloomberg News

Canadian Natural Gas Declines on Lower U.S. Furnace-Fuel Demand

March 13, 2012

Canadian natural gas fell as U.S. heating demand was pared by warmer-than-normal weather.

Alberta gas for April delivery declined 1.2 percent. Demand for heat across the U.S. will average 61 percent below normal through March 20, said forecaster Weather Derivatives. Chicago’s low March 17 may be 60 degrees Fahrenheit (16 Celsius), 13 higher than average, according to AccuWeather Inc.

“It’s pretty bearish right now,” said Eric Bickel, a natural gas analyst with Summit Energy Services in Louisville, Kentucky. Forecast demand for heat is “drastically below normal,” he said.

Alberta gas for April delivery fell 2 cents to C$1.74 a gigajoule ($1.67 per million British thermal units) as of 2:45 p.m. New York time on NGX, a Canadian Internet market.

NGX gas touched C$1.625 per gigajoule March 8, the lowest ever for the April near-month contract. 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 rose 3 cents to settle at $2.299 per million Btu.

Spot gas at the Alliance delivery point near Chicago fell 11.55 cents, or 5.4 percent, to $2.0354 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.

Spot Prices

At the Kingsgate point on the border of Idaho and British Columbia, gas was up 0.23 cent to $1.9903 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 1.49 cents to $2.0832.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.9 billion cubic feet, 147 million above target.

Gas was flowing at a daily rate of 1.99 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 2.01 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 645 million cubic feet. The system was forecast to carry 2.01 billion cubic feet today, or 76 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 3.1 billion cubic feet at 1:35 p.m.

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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