Canadian Gas Declines on Higher-Than-Normal U.S. Stockpiles

Canadian natural gas fell for a second day on mild weather and above-normal stocks of the fuel.

Alberta gas dropped 0.6 percent. Weather Derivatives of Belton, Missouri, said heating demand across the U.S., where most of Canada’s output is consumed, will trail normal by 17 percent through Dec. 23. Warm weather has pared declines in U.S. inventories since November.

“For the week ended Dec. 9 there was a 102 billion-cubic- foot withdrawal compared to a normal withdrawal of 162 billion,” James Williams, an economist with WTRG Economics in London, Arkansas, said in a note to clients today. “For the latest four-week period withdrawals typically total 265 billion. This year net withdrawals are 114 billion.”

Alberta gas for January delivery slipped 1.75 cents to C$2.89 a gigajoule ($2.64 per million British thermal units) as of 1:30 p.m. New York time, according to 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.’s Alberta system. NGX Alberta gas has fallen 21 percent this year.

Gas for January delivery dropped 1.4 cents to $3.113 per million Btu at 1:35 p.m. on the New York Mercantile Exchange.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.8 billion cubic feet, 50 million below its target.

Gas was flowing at a daily rate of 2.46 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 2.1 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 883 million cubic feet. The system was forecast to carry 1.77 billion cubic feet today, about 69 percent of its capacity of 2.65 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 3.07 billion cubic feet at 12:35 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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