Canadian Natural Gas Falls on Mild Weather, Inventory Outlook

Canadian natural gas for April delivery fell on forecasts of mild weather in the eastern U.S. and speculation that a U.S. government report will show a below- normal withdrawal from inventories of the heating fuel.

Temperatures may be mostly normal in the eastern U.S. from March 7 through March 11, according to Commodity Weather Group in Bethesda, Maryland. Heating demand in the Northeast may be 1 percent below normal from March 8 through March 12, according to Weather Derivatives in Belton, Missouri.

The U.S. Energy Department may say inventories dipped 85 billion cubic feet in the week ended Feb. 25, according to the median of 22 analyst estimates compiled by Bloomberg. The five- year average decline is 131 billion.

Gas at the Alliance Pipeline delivery point near Chicago dropped 14.37 cents, or 3.4 percent, to $4.0309 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 westernCanada.

Alberta gas for April delivery rose 1.5 cents, or 0.5 percent, to C$3.22 per gigajoule ($3.15 per million Btu) as 4:36 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 declined 5.5 cents, or 1.4 percent, to $3.818 per million Btu on theNew York Mercantile Exchange.

Alberta System

Volume on TransCanada’s Alberta system, the biggest gas- gathering network in the nation, was 15.8 billion cubic feet as of 4:30 p.m. in New York. Volume on the system fell by 1 billion in the past four hours.

Gas was flowing at a daily rate of 3.67 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 1.67 billion cubic feet.

Scheduled volume on TransCanada’s British Columbia system at Kingsgate was 1.69 billion cubic feet, 61 percent of capacity.

(Source: http://www.bloomberg.com/news/2011-03-02/canadian-natural-gas-falls-on-mild-weather-inventory-outlook.html)