Canadian Natural Gas Rises Amid Cooler-Than-Normal U.S. Weather

Canadian natural gas rose amid forecasts of cooler-than-normal weather in the U.S. Midwest and Northeast that could boost furnace use.

Alberta gas rose 6 percent. Demand for heat in the Midwest will be 37 percent above normal through April 30 and the Northeast will top seasonal norms by 25 percent, according to Weather Derivatives. Chicago’s low May 1 will drop to 40 degrees Fahrenheit (4 Celsius), 7 degrees below normal, forecaster AccuWeather Inc. said.

“We’re getting a bit of a bounce,” said Brad Florer, a trader with Kottke Associates in Louisville, Kentucky. “With the cooler temperatures we’re seeing, it’s a bit of a knee-jerk bullish reaction.”

Alberta gas for May delivery advanced 8.75 cents to C$1.535 a gigajoule ($1.47 per million British thermal units) as of 4 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 46 percent this year.

Natural gas for May delivery on the New York Mercantile Exchange rose 8 cents to settle at $2.007 per million Btu.

Spot gas at the Alliance delivery point near Chicago gained 4.02 cents, or 2 percent, to $2.0353 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 7.53 cents, or 4.4 percent, to $1.7728 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, prices rose 8.41 cents, or 4.7 percent, to $1.8587.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.6 billion cubic feet, 216 million below target.

Gas was flowing at a daily rate of 2.1 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 2.16 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.04 billion cubic feet. The system was forecast to carry 1.61 billion cubic feet today, or 61 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 3.22 billion cubic feet at 2:50 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