Canada Natural Gas Falls Amid Forecast of Ample Stored Supplies

March 4 (Bloomberg) -- Canadian natural gas at a Chicago hub fell for a third straight day as an analyst predicted that withdrawals from reserves this week will lag behind year-ago levels.

Utilities and other big gas users probably took 55 billion to 65 billion cubic feet of the fuel from underground storage last week, William Featherston, a UBS Securities LLC analyst, said in a note. The seasonal average in the past five years has been 96 billion. Demand for heat across the U.S. will trail normal by about 3 percent in the coming week, according to Belton, Missouri-based forecaster Weather Derivatives.

“We estimate storage exits winter at about 1.6 trillion cubic feet, roughly in line with the normal level,” Featherston said.

Gas at the Alliance Pipeline delivery point near Chicago tumbled 7.51 cents, or 1.9 percent, to $3.8949 per million British thermal units on the Intercontinental Exchange. Alliance is an express line that can carry about 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, prices fell 9.71 cents, or 2.6 percent, to $3.6846 per million Btu, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 6.13 cents, or 1.6 percent, to $3.769.

Alberta Gas

Alberta gas for April rose 0.25 cent to C$3.20 per gigajoule ($3.11 per million Btu) as of 2:50 p.m. New York time, according to NGX, a Canadian Internet market. Gas traded on the exchange is shipped to users in Canada and the U.S. Northeast, Midwest and West Coast.

Natural gas for April delivery rose 3.1 cents to $3.809 per million Btu on the New York Mercantile Exchange.

Volume on TransCanada’s Alberta system, the biggest gas- gathering network in the nation was 15.7 billion cubic feet, about 587 million below its target, as of 2:30 p.m. in New York. Gas flows from producers in western Canada have been hampered by persistent cold in the last week that has caused wells to freeze and processing equipment to work less efficiently.

Gas was flowing at a daily rate of 3.3 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 1.78 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.442 billion cubic feet. The system was forecast to carry 1.459 billion cubic feet today, about 50 percent of capacity.

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 2.91 billion cubic feet at 1:50 p.m.

(Source: http://www.businessweek.com/news/2011-03-04/canada-natural-gas-falls-amid-forecast-of-ample-stored-supplies.html)