Bloomberg News

Canada Natural Gas Prices Decline on U.S. Stockpile Forecasts

October 24, 2012

Canadian natural gas dropped as analysts predicted government data would show U.S. inventories expanded more than average last week.

November gas in Alberta declined 2.5 percent. An Energy Department report scheduled for release at 10:30 a.m. tomorrow in Washington may say inventories rose 67 billion cubic feet in the seven days ended Oct. 19 to 3.843 trillion, according to the median of 21 analyst estimates compiled by Bloomberg. The five- year average gain for the week is 65 billion.

’’Natural gas prices are coming under some selling pressure, erasing Tuesday’s gains in nervous trade ahead of Thursday’s DOE storage report,’’ said Tim Evans, an energy analyst at Citi Futures Perspective in New York, in a note to clients today.

Alberta gas for November delivery fell 8 cents to C$3.115 per gigajoule ($2.97 per million British thermal units) as of 3:07 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 November delivery on the New York Mercantile Exchange slid 8.5 cents, or 2.4 percent, to settle at $3.45 per million Btu. The futures have fallen 4.3 percent from a year ago. Prices gained 2.4 percent yesterday.

Gas Volume

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 15.8 billion cubic feet at 1 p.m. New York time.

Gas was flowing at a daily rate of 2 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 2.13 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 160 million cubic feet. The system was forecast to carry 1.51 billion cubic feet today. Estimated capacity was 1.67 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 2:05 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: Bill Banker at bbanker@bloomberg.net


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