Bloomberg News

Canada Natural Gas Advances on Forecasts for Hot U.S. Weather

August 06, 2012

Canadian natural gas climbed on forecasts of hotter-than-normal weather in the U.S. that may boost demand for imports of the fuel for power plants.

September gas in Alberta gained 2.1 percent as Commodity Weather Group LLC in Bethesda, Maryland, predicted normal or above-normal temperatures in the lower 48 states through Aug. 20. The high in New York on Aug. 9 may be 88 degrees Fahrenheit (31 Celsius), 4 higher than the usual reading, according to AccuWeather Inc. in State College, Pennsylvania.

“The weather is still a factor,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “This forecast will result in above-normal demand for natural gas for cooling, but not at the same level experienced for the last several months.”

Alberta gas for September delivery rose 4.5 cents to C$2.18 per gigajoule ($2.07 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.

Natural gas for September delivery on the New York Mercantile Exchange advanced 3.1 cents, or 1.1 percent, to settle at $2.908 per million Btu. The futures have declined 2.7 percent this year.

Weather Outlook

Cooling demand in the U.S. may be 17 percent above normal on Aug. 9, said Weather Derivatives in Belton, Missouri.

The high in Houston on Aug. 9 may be 96 degrees, 3 above normal, according to AccuWeather. Electricity producers account for about 36 percent of U.S. gas consumption, Energy Department data show.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.1 billion cubic feet at 2 p.m. New York time.

Gas was flowing at a daily rate of 1.95 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.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 6 million cubic feet. The system was forecast to carry 2.01 billion cubic feet today, compared with the estimated capacity of 2.02 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 2.88 billion cubic feet at 3:05 p.m.

To contact the reporter on this story: Christine Buurma in New York at cbuurma1@bloomberg.net

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


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