Canadian spot natural gas prices crept up Wednesday on stronger futures and a reversal of seasonal market tactics to play low winter demand off anticipated high summer consumption, industry sources said. Spot gas at the AECO storage hub in south-eastern Alberta, the country's benchmark pricing point, gained 8 Canadian cents to average C$6.41 a gigajoule, after rising 12 Canadian cents on Tuesday.
Deals traded in a tight 10 Canadian cent range, between C$6.35 to C$6.45 a GJ, according to Natural Gas Exchange.
Trading on reversed winter to summer spreads gave AECO some strength, traders said.
With forecasts of continued mild weather and low demand for the season - especially in the East - some players are buying the softer remaining winter months and selling them higher into late summer, one western Canadian trader said.
"The market isn't making a lot of sense right now," the trader said. "Summer's trading higher than winter, and people are playing the spread."
Fixed July and August contracts were trading in the C$6.60s per GJ.
Meanwhile, short-covering on the New York Mercantile exchange ahead of Thursday's US natural gas storage report was also a major contributor to the slight rise in Wednesday's AECO day deals, the trader said.
The NYMEX March contract finished up 6 cents at $6.376 per million British thermal units.
Prices at eastern Canadian export points rose, with day deals in Niagara, the southern Ontario point through which gas flows mostly the US Northeast, rose 12 cents per mmBtu to C$6.73, after gaining 15 cents in the previous session.
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