July 18 (Bloomberg) -- Canadian natural gas fell after earlier gains on forecasts that a heat wave in the U.S. Midwest will ease, decreasing demand for the power-plant fuel.
Canadian gas prices, which usually follow their U.S. counterparts on the New York Mercantile Exchange, dropped 0.1 percent as the MDA EarthSat Weather of Gaithersburg, Maryland, forecast for July 23 to July 27 said a “notable cooldown is favored by mid-period over the Midwest, which should push toward the East late.”
The U.S. National Weather Service “is still projecting pretty high temperatures for the next week or two, but when you look at that potential storage build being a little bit higher for the last report week, it provided a little bit of a downside to the Nymex gas market,” Eric Bickel, a commodity analyst at Summit Energy in Louisville, Kentucky, said in a telephone interview.
Alberta gas for August delivery declined 0.25 cent to C$3.60 per gigajoule ($3.56 per million British thermal units) as of 4:15 p.m. New York time, according to NGX, a Canadian Internet market. September gas fell 1.25 cents to C$3.585. Gas traded on the exchange goes to users in Canada and the U.S. and is priced on TransCanada Corp.’s Alberta system.
Natural gas in New York settled unchanged at $4.546 per million Btu on the New York Mercantile Exchange.
Cooling demand in New York will be about 42 percent more than normal until at least July 25, said Weather Derivatives, based in Belton, Missouri. Power plants use 30 percent of U.S. gas supplies, according to the Energy Department.
The high in Indianapolis today may reach 92 degrees Fahrenheit, 6 degrees above normal, according to AccuWeather Inc. of State College, Pennsylvania.
Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 15.63 billion cubic feet as of 3 p.m. in New York.
Gas was flowing at a daily rate of 2.53 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 1.28 billion cubic feet.
Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.01 billion cubic feet. The system was forecast to carry 1.75 billion cubic feet today, about 64 percent of its capacity of 2.76 billion.
Gas at the Alliance Pipeline delivery point near Chicago rose 13.47 cents, or 3 percent, to $4.6903 per million Btu today on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day to the Midwest from western Canada.
At the Kingsgate point on the border of Idaho and British Columbia, gas gained 12.38 cents, or 3 percent, to $4.2412.
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