Canada Natural Gas Fluctuates on U.S. Storage Report, Heat

Canadian natural gas fluctuated, declining after a U.S. report showed stockpiles increased more than expected and gaining on forecasts of more heat that may signal demand for the fuel.

August gas in Alberta declined 0.7 percent as the Energy Department said U.S. stockpiles expanded by 33 billion cubic feet to 3.135 trillion, compared with 87 bcf a year earlier. Analyst estimates compiled by Bloomberg showed an expected increase of 27 billion cubic feet. The price gained 0.2 percent earlier as MDA EarthSat Weather of Gaithersburg, Maryland, predicted temperatures would increase in the U.S. Midwest and Northeast next week.

“It’s rainy and cool in Houston but the rest of the country is still hot,” Kyle Cooper, director of research with IAF Advisors in Houston, said in a telephone interview. “That 33-billion-cubic-feet injection was still way below last year, we took out over 50 bcf in storage surplus, so from that perspective it’s not quite as bearish.”

Alberta gas for August delivery decreased 1.5 cents to C$2.28 per gigajoule ($2.12 per million British thermal units) as of 1:30 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.

Alberta gas has fallen 12 percent this year, from C$2.58 on Dec. 31, and risen 40 percent from C$1.625 at the end of March.

Natural gas for August delivery on the New York Mercantile Exchange gained 2.4 cents to $2.877 per million Btu at 1:33 p.m.

Hotter Weather

“The heat within the Midwest and East is still favored to peak during the first couple days of the period, with plenty of mid- to upper-90s in store,” MDA said in a forecast today for July 17-21. “This heat will weaken some by mid- to late period, but most of these areas will remain well to the hotter side of normal throughout.”

The high in Chicago on July 21 may be 96 degrees Fahrenheit (36 Celsius), 12 above normal, according to AccuWeather Inc. in State College, Pennsylvania. A day later, New York may reach 93, 9 more than usual.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.7 billion cubic feet at 1:30 p.m. 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 McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 1.99 billion cubic feet.

The available capacity on TransCanada’s British Columbia system at Kingsgate was 745 million cubic feet. The system was forecast to carry 1.87 billion cubic feet today, or 71 percent of normal capacity of 2.62 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 2.75 billion cubic feet at 12:25 p.m.

To contact the reporter on this story: Colin McClelland in Toronto at cmcclelland1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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