Canadian spot gas skids on moderate weather

Wed Apr 7, 2010 4:13pm EDT
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CALGARY, Alberta (Reuters) - Canadian spot natural gas prices fell on Wednesday as moderate weather forecasts left little prospect of higher heating demand in key markets and futures fell.

Spot gas at the AECO storage hub in southeastern Alberta dropped 16 Canadian cents to average C$3.54 a gigajoule.

Deals were done between C$3.47 and C$3.65 a GJ.

Canadian spot gas prices are nearly unchanged from a year ago on concerns about weak demand while production rises, particularly from shale-gas fields in the United States, and high inventories of the fuel remain a worry.

Last week's U.S. Energy Information Administration report showed total gas inventories rose to 1.638 trillion cubic feet. That was 16 billion cubic feet, or 1 percent, below last year's level but 160 bcf, or 11 percent, above the five-year average.

A Reuters poll on Wednesday showed inventories were expected to climb 29 bcf when weekly EIA storage data is released on Thursday at 10:30 a.m. EDT (1430 GMT).

Stocks rose an adjusted 17 bcf for the same week last year, while the five-year average gain for that week is 11 bcf.

In weather, Environment Canada called for Toronto highs to remain above the 10 Celsius (50 Fahrenheit) seasonal average for most of the next six days, with the exception of Friday, when the temperature is expected to dip to 6 C (43 F).

Southern Alberta temperatures are forecast to be at or just above seasonal averages Thursday, then cool to below the 10 C (50 F) norm through Tuesday, the agency said.   Continued...