Canadian Natural Gas Rises on Tighter Supply and Warm U.S. West

Canadian natural gas for rose for a second day on tighter supplies and forecasts of higher cooling demand in the U.S. West that would spur the need for the fuel to power air-conditioners.

Alberta gas for August delivery increased 0.25 cent to C$3.57 per gigajoule ($3.55 per million British thermal units) as of 3:10 p.m. New York time, according to NGX, a Canadian Internet market. July gas fell 1 cent to C$3.58. Gas traded on the exchange goes to users in Canada and the U.S. and is priced on TransCanada Corp.’s Alberta system.

Natural gas for August delivery on the New York Mercantile Exchange gained 5.9 cents to settle at $4.374 per million Btu.

“It’s probably a little bit tighter supply in the province at the moment because of field maintenance, and maybe there’s a little bit of fiscal short covering by traders, going into our long weekend,” Martin King, an analyst at FirstEnergy Capital Corp. in Calgary, said in a telephone interview.

Cooling demand in Los Angeles will be 48 percent above normal until at least July 7, according to Belton, Missouri- based forecaster Weather Derivatives. Power plants use 30 percent of U.S. gas supplies, according to the Energy Department.

Much of the West will have above-normal temperatures from July 4 to July 8, MDA EarthSat Weather of Gaithersburg, Maryland, said in a forecast to clients.

California Temperatures

The high in Los Angeles on July 4 may reach 88 degrees Fahrenheit (31 Celsius), 5 above normal, according to AccuWeather Inc. of State College, Pennsylvania.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 15.64 billion cubic feet as of 3 p.m. in New York.

Gas was flowing at a daily rate of 2.8 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 1.94 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.09 billion cubic feet. The system was forecast to carry 1.82 billion cubic feet today, about 63 percent of its capacity of 2.9 billion.

Gas at the Alliance Pipeline delivery point near Chicago fell 14.44 cents, or 3.2 percent, to $4.3347 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 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 fell 11.89 cents, or 2.8 percent, to $4.0972.

Source: http://www.bloomberg.com/news/2011-06-30/canadian-natural-gas-rises-on-tighter-supply-and-warm-u-s-west.html