Canadian Natural Gas Declines After U.S. Stockpiles Increase

Canadian natural gas fell following a report that U.S. stockpiles of the fuel increased last week in the earliest seasonal gain in five years.

Alberta gas declined 2.5 percent after the Energy Department (DOENUSCH) said U.S. natural gas stocks rose 11 billion cubic feet to 2.38 trillion in the week ended March 16. Warmer-than- normal weather has helped inventories climb to 54 percent above the five-year average.

“Mother Nature has just kicked natural gas in the guts,” said Kyle Cooper, director of research at IAF Advisors in Houston. “The weather on an absolute basis has been really bearish.”

Alberta gas for April delivery fell 4.75 cents to $1.82 a gigajoule ($1.73 per million British thermal units) as of 2:45 p.m. New York time on NGX, a Canadian Internet market. NGX gas is down 36 percent this year.

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 slid 9.1 cents, or 3.9 percent, to settle at $2.269 per million Btu.

Spot gas at the Alliance delivery point near Chicago slipped 1.85 cents to $2.1264 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day from western Canada.

Spot Prices

At the Kingsgate point on the border of Idaho and British Columbia, gas rose 1.26 cents to $2.1753 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, gas rose 0.18 cent to $2.2304.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.8 billion cubic feet, 32 million above target.

Gas was flowing at a daily rate of 1.82 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 2.24 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 917 million cubic feet. The system was forecast to carry 1.74 billion cubic feet today, or 66 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 3.1 billion cubic feet at 1:35 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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