Canadian Gas Drops on Speculation of U.S. Stockpile Increase

Canadian natural gas fell amid expectations that U.S. inventories of the fuel rose for a third straight week.

Alberta gas declined 2.3 percent. Stockpiles probably rose 33 billion cubic feet last week, the median of 31 analyst estimates compiled by Bloomberg (DOENUSCH). The increase has averaged 8 billion in the past five years, according to U.S. Energy Department (DOENUST5) data.

“The market is really struggling here,” said Kyle Cooper, director of research at IAF Advisors in Houston. “The price is already low. Inventories are bearish and the weather forecast remains bearish.”

Alberta gas for May delivery dropped 4 cents to C$1.71 a gigajoule ($1.63 per million British thermal units) as of 3:40 p.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. (TRP)’s Alberta system. NGX gas is down 43 percent this year.

Natural gas for May delivery on the New York Mercantile Exchange fell 4.6 cents, or 2.1 percent, to settle at $2.141 per million Btu.

Spot gas at the Alliance delivery point near Chicago gained 6.56 cents, or 3.1 percent, to $2.1707 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 advanced 7.71 cents, or 3.9 percent, to $2.0522 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, prices increased 7.66 cents, or 3.8 percent, to $2.1186.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.7 billion cubic feet, 87 million below target.

Gas was flowing at a daily rate of 1.93 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line, at 2 p.m. New York time.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 1.85 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 759 million cubic feet. The system was forecast to carry 1.9 billion cubic feet today, or 72 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 2:35 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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.