Canadian natural gas rose after seven straight days of declines amid signs that producers are slowing drilling programs to help bolster prices.
Alberta gas advanced 3.5 percent. Encana Corp. (ECA), Canada’s biggest gas producer, said Feb. 17 it would cut output and direct drilling efforts to oil and natural-gas liquids. The number of rigs drilling for gas in the U.S. dropped to 710 last week, the seventh consecutive decline, according to Baker Hughes Inc. (BAKEGAS) data.
“Horizontal gas rigs are down 26 percent from the average October level,” said Stephen Smith, an energy analyst and president of Stephen Smith Energy Associates in Natchez, Mississippi. “A visibly slower U.S. gas production growth rate lies ahead, probably during the second quarter.”
Alberta gas for March delivery rose 6.25 cents to C$1.87 a gigajoule ($1.79 per million British thermal units) at 1:30 p.m. New York time on NGX, a Canadian Internet market. NGX gas has dropped 11 percent this year.
NGX gas for April delivery advanced 3.75 cents, or 2 percent, to C$1.90 per gigajoule. 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 for April delivery on the New York Mercantile Exchange rose 7.9 cents, or 3.1 percent, to $2.598 per million Btu as of 1:35 p.m. The futures have gained 3.8 percent this month.
Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.3 billion cubic feet, 461 million below target.
Gas was flowing at a daily rate of 2.85 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 2.08 billion cubic feet.
Available capacity on TransCanada’s British Columbia system at Kingsgate was 596 million cubic feet. The system was forecast to carry 2.06 billion cubic feet today, or 77 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 2.99 billion cubic feet at 11:50 a.m.
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