Canadian natural gas dropped on forecasts for less hot weather on the U.S. East Coast that might reduce demand for imports of the power-plant fuel to run air conditioners.
August gas in Alberta fell 3.9 percent as Commodity Weather Group LLC in Bethesda, Maryland, predicted normal temperatures for the Eastern U.S. from Aug. 1 through Aug. 10. The Bethesda, Maryland-based forecaster’s models yesterday showed warmer-than- normal weather in the mid-Atlantic toward the end of the period.
“You are starting to see some of this extreme weather possibly easing,” said Carl Neill, a consultant with Risk Management Inc. in Atlanta. “This market is going to see a seasonal decline and it typically declines in the August- September timeframe. It did in nine out of 11 years and I don’t see why this year would be any different.”
Alberta gas for August delivery declined 9.25 cents to C$2.285 per gigajoule ($2.16 per million British thermal units) as of 4:20 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.
Natural gas for August delivery on the New York Mercantile Exchange fell 9.5 cents, or 3.1 percent, to settle at $3.01 per million Btu. The futures are up 0.7 percent this year.
The high temperature in Chicago on Aug. 3 may be 78 degrees Fahrenheit (26 Celsius), 5 below normal, said AccuWeather Inc. in State College, Pennsylvania. Washington’s high will be 2 below normal at 86 degrees.
Cooling demand in the north-central states will drop from 50 percent above normal on July 31 to 10 below normal on Aug. 2 through Aug. 6, according to Weather Derivatives in Belton, Missouri. Nationwide air-conditioning needs will drop from 17 percent above the norm to 6 above during the same periods.
Gas was flowing at a daily rate of 1.96 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 1.93 billion cubic feet.
The available capacity on TransCanada’s British Columbia system at Kingsgate was 110 million cubic feet today. The system was forecast to carry 1.91 billion, 95 percent of the estimated capacity of 2.018 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 2.73 billion cubic feet at 3:05 p.m.
To contact the reporter on this story: Naureen S. Malik in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Bill Banker at email@example.com