Canadian spot gas prices climb on cold forecasts

Thu Dec 2, 2010 5:42pm EST
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CALGARY, Alberta (Reuters) - Canadian spot natural gas prices rose on Thursday as temperatures cooled in big markets even though a key storage report showed inventory draws were lighter than expected.

Spot gas at the AECO storage hub in southeastern Alberta rose 5 Canadian cents to average C$3.65 a gigajoule. Deals were done between C$3.58 and C$3.70 a GJ.

Although temperatures in most big markets have cooled, boosting heating demand, near record amounts of stored gas have kept prices in check.

In its weekly report, the U.S. Energy Information Administration said gas inventories fell last week by 23 billion cubic feet to 3.814 trillion cubic feet, less than the 26 bcf draw forecast by a Reuters poll.

In Canada, stocks fell 17.7 bcf, or 2.7 percent, last week to 627.2 bcf, Canadian Enerdata reported.

Canadian storage facilities ended the week 90 percent full. A year earlier they stood at 92 percent of capacity.

Temperatures in southern Alberta will be below the seasonal average low of -12 Celsius (10 Fahrenheit) on the weekend, dropping to as low as -17C (1F) on Sunday, and will then warm, with lows of -1C (30F) expected on Tuesday, according to Environment Canada.

Toronto low temperatures are expected to be under the -4 C (25 F) average through Monday, the agency said. expects temperatures in the U.S. Northeast and Midwest, key gas consuming regions, to average below normal for the next two weeks.   Continued...