Canadian Natural Gas Rises on Lower-Than-Expected Storage Gain

Canadian natural gas for May delivery rose after the U.S. Energy Department said reserves of the fuel in underground storage increased less than analysts’ estimates last week.

U.S. gas in underground storage rose 28 billion cubic feet to 1.607 trillion in the week ended April 8, the Energy Department said today. Analysts in a Bloomberg survey estimated supplies would rise 35 billion cubic feet.

“There may be some additional gas burn with nuclear and coal” power plant maintenance, saidMartin King, senior commodities analyst with FirstEnergy Capital Corp. in Calgary.

Alberta gas for May delivery rose 6.5 cents, or 1.4 percent, to C$3.41 per gigajoule ($3.36 per million British thermal units) as of 2:55 p.m. New York time, according to NGX, a Canadian Internet market. Gas traded on the exchange goes to users in Canada and the U.S. and is priced on TransCanada’s Alberta system.

Natural gas for May delivery on the New York Mercantile Exchange gained 7.1 cents, or 1.7 percent, to settle at $4.212 per million Btu.

Spot prices at U.S. delivery points fell after forecasters said a snowstorm crossing Alberta and the U.S. Plains states today won’t cause flurries in larger Midwest cities. Demand for heat in Chicagowill top out at 34 percent above normal tomorrow and then fade to below-normal levels by April 19, according to Belton, Missouri-based forecaster Weather Derivatives.

Alliance, Kingsgate

Gas at the Alliance Pipeline delivery point near Chicago fell 1.79 cents to $4.2025 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, gas tumbled 9.01 cents, or 2.2 percent, to $3.9272, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 6.87 cents to $4.0506.

Volume on TransCanada Corp.’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.3 billion cubic feet as of 2 p.m. in New York, about 62 million above its target level.

Gas was flowing at a daily rate of 2.76 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 1.51 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 672 million cubic feet. The system was forecast to carry 1.84 billion cubic feet today, about 73 percent of its capacity of 2.51 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 2.87 billion cubic feet at 2:05 p.m.

(Source: http://www.bloomberg.com/news/2011-04-14/canadian-natural-gas-rises-on-lower-than-expected-storage-gain.html)