Bloomberg News

Canada Natural Gas Jumps Most in 4 Years on U.S. Storage Report

June 14, 2012

Canadian natural gas jumped the most in more than four years after a U.S. government report showed a smaller-than-expected gain in supplies last week.

July gas in Alberta surged 15 percent, the most since at least Dec. 19, 2007, when NGX, a Canadian internet market, began detailed records. The Energy Department said U.S. stockpiles expanded by 67 billion cubic feet to 2.944 trillion. Analyst estimates compiled by Bloomberg showed an expected increase of 75 billion. The five-year average stockpile gain for the week is 88 billion cubic feet.

“It was storage-initiated and then you had various short- buying over the next three hours,” Carl Neill, a consultant with Risk Management Inc. in Atlanta, said in a telephone interview. “The market has been in a down trend where it lost over 70 cents, so it was a little oversold.”

Alberta gas for July delivery gained 24.25 cents to C$1.92 a gigajoule ($1.78 per million British thermal units) as of 3:45 p.m. New York time. Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp. (TRP)’s Alberta system. NGX gas is down 27 percent this year.

Natural gas for July delivery on the New York Mercantile Exchange gained 31 cents to settle at $2.495 per million Btu.

Spot gas at the Alliance delivery point near Chicago rose 1.75 cents, or 0.8 percent, to $2.2128 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 advanced 6.18 cents, or 3.2 percent, to $2.0198 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, prices gained 4.99 cents, or 2.4 percent, to $2.1111.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.4 billion cubic feet at 3:30 p.m. New York time.

Gas was flowing at a daily rate of 2.08 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 1.82 billion cubic feet.

The available capacity on TransCanada’s British Columbia system at Kingsgate was 723 million cubic feet. The system was forecast to carry 1.83 billion cubic feet today, or 72 percent of normal capacity of 2.55 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 2.78 billion cubic feet at 2:50 p.m.

To contact the reporter on this story: Colin McClelland in Toronto at cmcclelland1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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