Canadian natural gas rose to an 11- month high after the U.S. Energy Department reported a shrinking gas storage surplus yesterday.
The November gas contract in Alberta rose 0.9 percent to its highest level since Nov. 10. The Energy Department said inventories expanded by 51 billion cubic feet last week, less than the five-year average gain of 71 billion and last year’s 106 billion increase.
“We’re having a December rally in the middle of October; it’s a little disconcerting,” said Carl Neill, a consultant with Risk Management Inc. in Atlanta. “Every single weekly storage injection that we get pretty much falls below last year’s levels.”
Neill, whose company hedges for end-users such as power plants, said natural gas didn’t find a low in the fall as it typically does because prices were already low from the fourth- warmest winter on record.
“The fact that it’s not falling is forcing people to come in and buy,” he said.
Alberta gas for November delivery rose 3 cents to C$3.30 per gigajoule ($3.15 per million British thermal units) at 10:55 a.m. New York time on the NGX, a Canadian electronic exchange.
Natural gas for November delivery on the New York Mercantile Exchange rose 4.2 cents, or 1.2 percent, to $3.629 per million Btu.
Most of the U.S. will see higher-than-normal temperatures over the next five days, according to Commodity Weather Group of Bethesda, Maryland. U.S. heating demand is expected to be 44 percent below normal over the next seven days, according to Weather Derivatives of Belton, Missouri.
Starting Oct. 24, a cold front will affect the western U.S and Canada, Commodity Weather Group said. The southern and eastern U.S. will see warmer weather until Oct. 28, when the much of the U.S. will see lower-than-normal temperatures into early November.
Volume on TransCanada’s Alberta system, which collects the output from most of Canada’s gas wells, was 16.2 billion cubic feet at 10:30 a.m. New York time.
Gas was flowing at a daily rate of 1.99 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 rate was 2.07 billion cubic feet.
TransCanada’s British Columbia system at Kingsgate had 217 million cubic feet per day of available capacity. The system was forecast to carry 1.45 billion cubic feet today, 87 percent of estimated capacity.
The volume on Spectra Energy Corp.’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 2.93 billion cubic feet at 10:35 a.m.
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