Bloomberg News

Canadian Natural Gas Rises as Inventory Drop Exceeds Estimates

March 15, 2012

Canadian natural gas rose after a report that U.S. stockpiles fell more last week than analysts had estimated.

Alberta gas for April delivery gained 0.6 percent following the Energy Department (DOENUSCH) report that U.S. stockpiles dropped 64 billion cubic feet to 2.369 trillion in the week ended March 9. Inventories had been expected to fall 59 billion cubic feet, the median of analyst estimates compiled by Bloomberg (DOENUSCH).

“The withdrawal was a little larger than people thought it would be,” said Gordy Elliott, a risk-management specialist with INTL FC Stone LLC in St. Louis Park, Minnesota. “Base demand is starting to grow as gas replaces coal.”

Alberta gas for April delivery gained 1 cent to C$1.81 a gigajoule ($1.74 per million British thermal units) as of 2:45 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 fell 0.5 cent to settle at $2.279 per million Btu.

Spot gas at the Alliance delivery point near Chicago rose 1.46 cents to $2.0616 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 gained 7.49 cents, or 3.7 percent, to $2.0871 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, gas advanced 8.82 cents, or 4.3 percent, to $2.1229.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.4 billion cubic feet, 371 million below target.

Gas was flowing at a daily rate of 1.76 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 2.3 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 925 million cubic feet. The system was forecast to carry 1.73 billion cubic feet today, or 65 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 3.04 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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