Canada Natural Gas Declines as Mild U.S. Weather Pares Demand

Canadian natural gas fell as mild weather in the U.S. was expected to reduce furnace use in the biggest consuming region for the nation’s gas output.

Alberta gas slipped 0.5 percent after forecasters including Weather Derivatives predicted above-normal temperatures. Heating demand in the U.S. will trail normal by 23 percent through Jan. 10, Belton, Missouri-based Weather Derivatives said.

“There’s an overabundance of supply and the weather continues to stay warm,” said Gordy Elliott, a risk management specialist at FC Stone LLC in St. Louis Park, Minnesota. “We’re seeing some pressure put on prices here.”

Alberta gas for February delivery fell 1.25 cents to C$2.615 a gigajoule ($2.45 per million British thermal units) at 10:40 a.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.’s Alberta system.

Gas for February delivery declined 1.6 cents to $2.973 per million Btu at 11:27 a.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 16.5 billion cubic feet, 254 million below target.

Gas was flowing at a daily rate of 3.35 billion cubic feet at Empress, Alberta, at 11 a.m. in New York. The fuel is transferred to TransCanada’s main line at Empress.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 2 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 924 million cubic feet. The system was forecast to carry 1.73 billion cubic feet today, or 65 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 2.69 billion cubic feet at 9:50 a.m.

Spectra issued an operational flow order today, warning customers not to take more gas off the system than contracted.

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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