Aug. 8 (Bloomberg) -- Canadian natural gas dropped on speculation that milder U.S. weather will add to a glut of the fuel in storage.
September gas in Alberta slid 0.8 percent as Commodity Weather Group LLC in Bethesda, Maryland, predicted mostly normal temperatures in the central and eastern U.S. from Aug. 8 to Aug. 12. The high in Houston on Aug. 12 may be 94 degrees Fahrenheit (34 Celsius), 1 higher than the usual reading, said AccuWeather Inc. in State College, Pennsylvania.
The stockpile report “should be sufficient to refocus participants’ attention on the supply overhang, as weather-related demand continues to diminish,” said Mike Fitzpatrick, the editor of the Energy OverView newsletter in New York. “Short and intermediate weather forecasts show lingering summer cooling demand, but nowhere near what was experienced earlier in the summer.”
Alberta gas for September delivery fell 1.75 cents to C$2.215 per gigajoule ($2.11 per million British thermal units) as of 3:15 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 September delivery on the New York Mercantile Exchange declined 3.1 cents, or 1.1 percent, to settle at $2.933 per million Btu. The futures are down 1.9 percent this year.
Cooling demand in the U.S. may match the normal level on Aug. 12, according to Weather Derivatives in Belton, Missouri. Electricity producers account for about 36 percent of U.S. gas consumption, Energy Department data show.
Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 15.9 billion cubic feet at 2 p.m. New York time.
Gas was flowing at a daily rate of 1.83 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 2 billion cubic feet.
Available capacity on TransCanada’s British Columbia system at Kingsgate was 31 million cubic feet. The system was forecast to carry 1.99 billion cubic feet today, compared with the estimated capacity of 2.02 billion.
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