July 24 (Bloomberg) -- Canadian natural gas climbed on forecasts of above-normal temperatures that may increase demand for the fuel to generate electricity.
August gas in Alberta gained 3.7 percent as Commodity Weather Group LLC in Bethesda, Maryland, predicted above-normal temperatures in the central U.S through Aug. 7. Cooling demand in the U.S. may be 7 percent above normal from July 30 through Aug. 3, according to Weather Derivatives in Belton, Missouri.
“It is becoming clear that the weather is again the best friend of the natural gas market,” said Martin King, an analyst with FirstEnergy Capital Corp in Calgary. “Since the beginning of June 2012, U.S. cumulative cooling-degree days are 23 percent greater than average.”
Alberta gas for August delivery gained 8.75 cents to C$2.455 per gigajoule ($2.28 per million British thermal units) as of 2:55 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.’s Alberta system.
Natural gas for August delivery on the New York Mercantile Exchange rose 7 cents, or 2.3 percent, to settle at $3.187 per million Btu, the highest close since Dec. 13.
Cooling degree days are a measure of weather-driven demand for natural gas and coal during the summer.
The high temperature in Chicago on Aug. 5 may be 94 degrees Fahrenheit (34 Celsius), 11 above normal, according AccuWeather Inc. in State College, Pennsylvania.
Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.2 billion cubic feet at 3 p.m. New York time.
Gas was flowing at a daily rate of 1.95 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 1.94 billion cubic feet.
There was no available capacity on TransCanada’s British Columbia system at Kingsgate. The system was forecast to carry 2.056 billion cubic feet today, above 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 2.81 billion cubic feet at 1:50 p.m.
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