Bloomberg News

Canada Natural Gas Falls on U.S. Forecast for Moderating Weather

July 13, 2012

Canadian natural gas fell for a second day after forecasters predicted heat in the Northeast will ease toward month’s end, which may signal less demand for the fuel.

August gas in Alberta declined 2.2 percent as MDA EarthSat Weather of Gaithersburg, Maryland, said temperatures July 18-22 would fall to normal in Boston and New York.

“It’s a little bit weather-related and heading into the weekend,” Peter Linder, president of the DeltaOne Energy Fund in Calgary, said in a telephone interview. “It’s a little bit of a pause before we’re testing $3 next week” on the New York Mercantile Exchange.

Alberta gas for August delivery dropped 5 cents to C$2.22 per gigajoule ($2.07 per million British thermal units) as of 2:55 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.

Alberta gas has fallen 14 percent this year, from C$2.58 on Dec. 31, and risen 37 percent from C$1.625 at the end of March.

Natural gas for August delivery on Nymex settled unchanged at $2.874 per million Btu.

The high in New York and Boston on July 22 may be 83 degrees Fahrenheit (28 Celsius), which is 1 above normal in the home of the Yankees and one below usual where the Red Sox play, according to AccuWeather Inc. in State College, Pennsylvania.

Spot Prices

Spot gas at the Alliance delivery point near Chicago rose 0.48 cent to $2.9297 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 fell 4.14 cents, or 1.6 percent, to $2.5156 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, prices declined 4.01 cents, or 1.5 percent, to $2.7176.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.5 billion cubic feet at 3 p.m. New York time.

Gas was flowing at a daily rate of 1.96 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 2.02 billion cubic feet.

The available capacity on TransCanada’s British Columbia system at Kingsgate was 725 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 2.78 billion cubic feet at 1:50 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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