Canadian Natural Gas Falls as U.S. Stockpile Increase Forecast

Canadian natural gas fell amid speculation that warmer-than-normal weather in the U.S. led to a second-straight weekly increase in inventories.

Alberta gas declined 1 percent. U.S. stocks of the fuel probably rose 48 billion cubic feet last week, the median of 24 analyst estimates compiled by Bloomberg (DOENUSCH). The five-year average inventory change for the week is a decrease of 8 billion cubic feet, according to the Energy Department (DOENUST5).

“They just keep building up stocks,” said Gordy Elliott, a risk management specialist at INTL FC Stone Inc. in St. Louis Park, Minnesota. “It’s pretty bearish.”

Alberta gas for April delivery fell 1.75 cents to $1.675 a gigajoule ($1.59 per million British thermal units) as of 2:50 p.m. New York time on NGX, a Canadian Internet market. NGX gas is down 41 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. NGX gas touched C$1.625 a gigajoule March 8, the lowest for the April near-month contract since it started trading in 2000.

Natural gas for April delivery on the New York Mercantile Exchange fell 1.7 cents to settle at $2.191 per million Btu.

Spot gas at the Alliance delivery point near Chicago declined 1.04 cents to $2.0576 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 dropped 2.5 cents to $1.8476 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, gas fell 5.05 cents, or 2.5 percent, to $1.9361.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.9 billion cubic feet, 99 million above target.

Gas was flowing at a daily rate of 1.92 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 2.23 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 971 million cubic feet. The system was forecast to carry 1.68 billion cubic feet today, or 63 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 3.01 billion cubic feet at 1:50 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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