Canadian Natural Gas Tumbles as Mild Weather Forecast for U.S.

Canadian natural gas fell for the first time in four days as mild U.S. weather pared demand for furnace fuels.

Alberta gas fell 7.2 percent. Heating demand in the U.S. will trail normal by 24 percent through Feb. 2, according to forecaster Weather Derivatives. Chicago’s low will be 34 degrees Fahrenheit (1 Celsius) on Jan. 31, 15 degrees above normal, according to AccuWeather Inc. Gas had gained for three days after Chesapeake Energy Corp. (CHK) said it will pare output.

“Weather is king,” said Kyle Cooper, director of research with IAF Advisors in Houston. “Nature continues to trump the production cuts.”

Alberta gas for February delivery dropped 17.5 cents to C$2.245 a gigajoule ($2.13 per million British thermal units) at 11:45 a.m. New York time on NGX, a Canadian Internet market. NGX Alberta gas has slipped 15 percent this month.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp.’s Alberta system.

Natural gas for February delivery on the New York Mercantile Exchange fell 14.9 cents, or 5.5 percent, to $2.58 per million Btu as of 12:15 p.m.

U.S. inventories fell 192 billion cubic feet, or 5.8 percent, to 3.098 trillion cubic feet last week, according to the Energy Department. Stockpiles had been expected to fall 175 billion cubic feet, the median of analyst estimates compiled by Bloomberg (DOENUSCH).

Pipeline Flows

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.8 billion cubic feet, 31 million above target.

Gas was flowing at a daily rate of 2.41 billion cubic feet at Empress, Alberta. 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 2.14 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 292 million cubic feet. The system was forecast to carry 1.73 billion cubic feet today, or 86 percent of its capacity of 2.02 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 3.06 billion cubic feet at 11:05 a.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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