Bloomberg News

Canada Natural Gas Falls Before U.S. Storage Report Tomorrow

June 20, 2012

Canadian natural gas declined prior to the release of a U.S. government report on storage as forecasters predicted lower temperatures that may cut demand for the power-plant fuel.

July gas in Alberta fell 2.5 percent as MDA EarthSat Weather of Gaithersburg, Maryland, said cooler-than-normal weather will prevail in the Northeast from June 25 to June 29. The Energy Department may report tomorrow that U.S. stockpiles for the week ended June 15 increased 64 billion cubic feet, according to analyst estimates compiled by Bloomberg.

“With tomorrow’s storage number we could see a lot of activity around that, so there could be some hesitation ahead of that report,” Eric Bickel, an analyst at Summit Energy Services in Louisville, Kentucky, said in a telephone interview.

Alberta gas for July delivery dropped 4.75 cents to C$1.89 a gigajoule ($1.76 per million British thermal units) as of 3:10 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. NGX gas is down 27 percent this year.

Natural gas for July delivery on the New York Mercantile Exchange fell 2.8 cents to settle at $2.517 per million Btu.

NYC Cooler

The high for New York on June 26 may be 76 degrees Fahrenheit (24 Celsius), 6 below normal, said AccuWeather.com of State College, Pennsylvania.

“The trough overhead in the Northeast will keep temperatures generally cooler than normal as it continues to be supported by the blocking pattern further north,” Eric Wertz, an MDA meteorologist, wrote in a 6- to 10-day forecast today.

Spot gas at the Alliance delivery point near Chicago rose 1.3 cents, or 0.5 percent, to $2.6891 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 advanced 1.43 cents, or 0.6 percent, to $2.317 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, prices gained 1.03 cents, or 0.4 percent, to $2.4431.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.3 billion cubic feet at 3 p.m. New York time.

Gas Flows

Gas was flowing at a daily rate of 2.07 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 2.06 billion cubic feet.

The available capacity on TransCanada’s British Columbia system at Kingsgate was 726 million cubic feet. The system was forecast to carry 1.89 billion cubic feet today, or 72 percent of normal capacity of 2.62 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 2.98 billion cubic feet at 2:05 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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