Bloomberg News

Canada Natural Gas Falls on Outlook for Milder Weather

June 06, 2012

Canadian natural gas fell amid forecasts of milder-than-normal U.S. weather that may pare demand for power-generating fuels.

July gas in Alberta fell 2.9 percent. Cooling demand in the U.S. Midwest, the largest consumer of Canada’s gas exports, will trail normal by 59 percent tomorrow, according Belton, Missouri- based Weather Derivatives. Chicago’s high will be 72 degrees Fahrenheit (22 Celsius), 5 lower than normal, AccuWeather Inc. predicted.

“The heat looks like it’s backing off,” said Kyle Cooper, director of research with IAF Advisors in Houston. “That will help keep a lid” on gas prices.

Alberta gas for July delivery declined 5.5 cents to C$1.875 a gigajoule ($1.73 per million British thermal units) as of 2 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.’s Alberta system. NGX gas is down 34 percent this year.

Natural gas for July delivery on the New York Mercantile Exchange fell 3.8 cents to $2.408 per million Btu as of 2:07 p.m.

Spot gas at the Alliance delivery point near Chicago rose 0.51 cent to $2.4493 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 declined 3.58 cents, or 1.6 percent, to $2.1689 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, prices were down 8.5 cents, or 3.7 percent, to $2.2892.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.9 billion cubic feet, 120 million above target.

Gas was flowing at a daily rate of 2.06 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 2.04 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 141 million cubic feet. The system was forecast to carry 1.84 billion cubic feet today, or 95 percent of its capacity of 1.98 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 2.73 billion cubic feet at 12:50 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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