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Canadian Gas Falls as Supplies May Be Adequate for Cold Weather

Feb. 7 (Bloomberg) -- Canadian natural gas for March fell on speculation that colder weather in the U.S. won’t be enough to erode an abundance of the fuel in underground storage.

Alberta gas dropped 4.3 percent. Demand for heat in the Northeast will average 4 percent above normal through Feb. 14, according to Belton, Missouri-based Weather Derivatives. U.S. gas stockpiles totaled 2.966 billion cubic feet on Jan. 27, 25 percent above the five-year average for the week, Energy Department data show.

“The bump we’re seeing in U.S. temperatures has helped,” said Martin King, senior commodities analyst at FirstEnergy Capital Corp. in Calgary. “If it only lasts four or five days it’s too little, too late.”

Alberta gas for March delivery fell 9.25 cents to C$2.0625 a gigajoule ($1.97 per million British thermal units) at 2:35 p.m. New York time on NGX, a Canadian Internet market. NGX gas has lost 28 percent this year.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp.’s Alberta system.

Natural gas for March delivery on the New York Mercantile Exchange fell 7.8 cents, or 3.1 percent, to settle at $2.472 per million Btu.

Gas for prompt delivery rose as the U.S. Northeast and Midwest braced for colder-than-normal weather starting this weekend. New York will touch 19 Fahrenheit (minus 7 Celsius) Feb. 11, 9 degrees lower than normal, according to AccuWeather Inc. Chicago will drop to 12 on Feb. 10, 8 lower than normal, the State College, Pennsylvania-based forecaster said.

Spot Prices

Spot gas at the Alliance delivery point near Chicago gained 10.38 cents, or 3.9 percent, to $2.7915 per million Btu on the Intercontinental Exchange. Alliance, an express line, 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 advanced 5.83 cents, or 2.3 percent, to $2.5902. At Malin, Oregon, where Canadian gas is traded for California markets, gas rose 10.84 cents, or 4.1 percent, to $2.763.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.5 billion cubic feet, 262 million below target.

Gas was flowing at a daily rate of 2.41 billion cubic feet at Empress, Alberta. The fuel is transferred to TransCanada’s main line at Empress.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 2.18 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 542 million cubic feet. The system was forecast to carry 1.9 billion cubic feet today, or 78 percent of its capacity of 2.44 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 2.97 billion cubic feet at 1:35 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

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