Canadian natural gas for November fell after the U.S. raised its forecast for natural gas output in 2011 by 0.3 percent and cut its consumption outlook. Marketed gas production will average 65.99 billion cubic feet a day in 2011, up from 65.79 billion estimated in September, the Energy Department said in its monthly Short-Term Energy Outlook, released today in Washington. Total gas consumption will decrease to 67.23 billion cubic feet daily from 67.29 billion estimated in September. “There’s a lot of supply and not much demand,” said Gordy Elliot, a risk-management specialist at INTL FCStone Inc. in St. Louis Park, Minnesota. Alberta gas for November delivery fell 12.25 cents, or 3.9 percent, to C$3.06 per gigajoule ($2.85 per million British thermal units) as of 4:10 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. and is priced on TransCanada Corp.’s Alberta system. Gas for November delivery on the New York Mercantile Exchange dropped 12.7 cents, or 3.5 percent, to settle at $3.489 per million Btu. Gas for prompt delivery at U.S. border points where Canadian gas is traded rose on forecasts of colder weather in the U.S. Midwest, the biggest consuming region for Canada’s gas exports. Chicago will have a low of 31 degrees Fahrenheit (minus 1 Celsius) on Oct. 19, 14 degrees Below normal, according to AccuWeather Inc. Spot gas at the Alliance Pipeline delivery point near Chicago rose 2.85 cents to $3.5771 per million Btu 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. Regional Prices At the Kingsgate point on the border of Idaho and British Columbia, gas jumped 12.54 cents, or 4 percent, to $3.298, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas gained 11.81 cents, or 3.6 percent, to $3.3783 per million Btu. Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.2 billion cubic feet, 318 million below the target. Gas was flowing at a daily rate of 2.97 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 1.9 billion cubic feet. Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.35 billion cubic feet. The system was forecast to carry 1.41 billion cubic feet today, about 51 percent of its capacity of 2.76 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 2.89 billion cubic feet at 3:20 p.m. To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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