Canada Gas Falls After Hurricane Sandy Knocks Out Power in U.S.
Canadian natural gas declined after Hurricane Sandy knocked out power stations in the U.S. Northeast, reducing demand for gas used to generate electricity.
Prices fell as much as 2.9 percent. The hurricane knocked out power to 8.1 million people in the Northeast and a state of emergency was declared for 13 states in the storm’s wake, from Maine to West Virgina, according to the Energy Department.
“There are approximately 8 million people immediately without power due to Hurricane Sandy -- a huge damper on demand,” Matt Smith, a commodity analyst at Summit Energy Services Inc. in Louisville, Kentucky, wrote in a note to clients.
November gas in Alberta declined 4 cents to C$3.1325 per gigajoule ($2.97 per million British thermal units) at 12:05 p.m. New York time on NGX, a Canadian electronic exchange.
Natural gas for December delivery on the New York Mercantile Exchange declined 21.8 cents, or 6.3 percent, to $3.689 per million Btu at 12:22 p.m.
Pit trading in New York was canceled for a second day because of the storm.
Weather will be warmer than normal in the western half of the U.S. over the next ten days, while low temperatures in the northeast will dissipate over this week, said MDA EarthSat Weather of Gaithersburg, Maryland. Heating demand will be 4 percent above normal over the next seven days, according to Weather Derivatives of Belton, Missouri.
Volume on TransCanada’s Alberta system, which collects the output from most of Canada’s gas wells, was 15.8 billion cubic feet at 11 a.m. New York time, 97 percent its target rate
Gas was flowing at a daily rate of 2.05 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 rate was 1.97 billion cubic feet.
TransCanada’s British Columbia system at Kingsgate had 1.22 million cubic feet per day of available capacity. The system was forecast to carry 1.51 billion cubic feet today, 55 percent of estimated capacity.
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 3.13 billion cubic feet at 10:50 a.m.
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