Canadian Natural Gas Up on Higher U.S. Heating, Cooling Demand

Canadian natural gas rose as late- season cold in the U.S. Midwest boosts furnace use and warm weather in the South spurs air-conditioning needs.

Demand for heat in the Chicago area will top normal by 52 percent tomorrow as cold weather lingers over the Midwest, according to Weather Derivatives. Cooling needs elsewhere will drive air conditioning use to 66 percent above seasonal norms for the next week, the Belton, Missouri-based forecaster said.

“There’s a very big split between the North and the South right now,” said Bob Haas, a meteorologist at MDA EarthSat Weather in Gaithersburg, Maryland. “You don’t get that too often.”

Alberta gas for May delivery rose 8.25 cents, or 2.4 percent, to C$3.46 per gigajoule ($3.42 per million British thermal units) as of 3 p.m. New York time, according to NGX, a Canadian Internet market. Gas traded on the exchange goes to users in Canada and the U.S. and is priced on TransCanada’s Alberta system.

Natural gas for May delivery on the New York Mercantile Exchange gained 12.4 cents, or 3 percent, to settle at $4.262 per million Btu.

Spot gas at a Chicago hub where Canadian gas is traded dropped after touching a three-week high yesterday on forecasts of colder weather. Gas at the Alliance Pipeline delivery point fell 3.49 cents to $4.4294 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry about 1.5 billion cubic feet a day to the Midwest from western Canada.

Hub Prices

At the Kingsgate point on the border of Idaho and British Columbia, gas gained 0.19 cent to $4.1013, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 0.66 cent to $4.1761.

Volume on TransCanada Corp.’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.2 billion cubic feet as of 1:30 p.m. in New York, about 88 million below its target level.

Gas was flowing at a daily rate of 2.66 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 1.74 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 668 million cubic feet. The system was forecast to carry 1.84 billion cubic feet today, about 74 percent of its capacity of 2.51 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 2.82 billion cubic feet at 1:50 p.m.

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net.

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

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