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Canada Natural Gas Rises Following Release of U.S. Storage Data

Canadian natural gas prices rose, following U.S. futures higher, after the Energy Department reported stockpiles of the fuel increased by 80 billion cubic feet last week to 3.576 trillion.

October gas in Alberta rose 1.4 percent as department data showed the weekly storage injection was above the five-year seasonal average of 76 billion cubic feet while below last year’s 104 billion, keeping inventories at record highs for this time of year. U.S. gas prices advanced 2.6 percent to the most in 2012.

“We’re sort of in a new situation with storage levels remaining this high over the whole year,” said Brad Florer, a trader at Kottke Associates LLC in Louisville, Kentucky. Weather and economic data over the next few weeks will determine “whether we can maintain some strength above $3,” he said.

Alberta gas for October delivery rose 3.5 cents to C$2.525 per gigajoule ($2.44 per million British thermal units) as of 3:25 p.m. New York time.

Natural gas for November delivery on the New York Mercantile Exchange rose 8.2 cents to settle at $3.297 per million British thermal units, the highest level since Dec. 9.

Above-average temperatures are expected for California and the western halves of the U.S. and Canada this weekend and early next week, with temperatures possibly reaching 100 Fahrenheit (38 Celsius) in California, according to Commodity Weather Group LLC of Bethesda, Maryland. In the first week of October, a cold front is expected to bring below-normal temperatures to western Canada, then shift to the U.S. Midwest Oct. 7-11.

Cooling Demand

U.S. cooling demand will be 31 percent above the seasonal average over the next seven days and heating demand will be 62 percent below normal, Weather Derivatives in Belton, Missouri, said today.

Net Canadian gas exports to the U.S. averaged 5.57 billion cubic feet per day in the seven days ended Sept. 20, according to data collected by LCI Energy Insight, an El Paso, Texas energy advisory firm.

Volume on TransCanada’s Alberta system, which collects the output from most of Canada’s gas wells, was 15.92 billion cubic feet at 2:30 p.m. New York time, 300 million below target.

Gas was flowing at a daily rate of 2.09 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 1.98 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.05 billion cubic feet. The system was forecast to carry 1.81 billion cubic feet today. Estimated capacity was 2.87 billion.

The volume on Spectra Energy Corp.’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 2.78 billion cubic feet at 2:35 p.m.

To contact the reporter on this story: Edward Welsch in Calgary at ewelsch1@bloomberg.net

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

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