Alberta wildfires hit gas flow out of Canada to US, spiking prices

OTTAWA (Reuters) -Alberta officials on Thursday warned more wildfires could spread in next few hot and dry days, even as firefighters make progress in tackling widespread blazes that have slowed the outflow of natural gas from Canada into the United States, spiking prices.

Record-high temperatures and tinder-dry vegetation have led to an intense, early start to the wildfire season in western Canada this year and forecasters see no improvement in conditions at least until next week.

The oil-rich province of Alberta, which is holding provincial elections on May 29, has been hit the hardest, with tens of thousands of people to forced to evacuate homes this year.

Wildfires have also proliferated in neighboring British Columbia, as well as in Saskatchewan and Manitoba provinces.

The amount of gas flowing from Canada to the United States dropped to a fresh 25-month low of 6.4 billion cubic feet per day (bcfd) on Wednesday, according to Refinitiv, as wildfires disrupted production.

U.S. gained about 2% on Thursday to a two-week high on the reduction in imports from Canada even as mild weather in the U.S. Lower 48 keeps demand for the fuel low for both heating and cooling. [NGA/]

U.S. gas futures have gained about 13% over the past two weeks since those Canadian exports started to decline.

There were about 92 active wildfires and over 10,000 people out of their homes as of Thursday, Alberta officials told a daily briefing. Lifting of evacuation orders has helped bring down the number of evacuees from over 17,000 earlier this week.

The wildfires, which officials said are significantly higher in number than usual, have put Alberta Premier Danielle Smith’s disaster management skills – as well as her party’s policies – under the microscope ahead of the provincial election.

“Firefighters can experience challenging conditions in hot, dry and windy weather, but progress has been made on many active wildfires,” said Christie Tucker, information unit manager at Alberta Wildfire.

Nearly 2,700 firefighters, including personnel from Canadian and U.S. agencies, and the Canadian army, are currently battling the wildfires and more are expected to join on Thursday, Tucker said.

“We are expecting and preparing for more active wildfire behavior today and over the next few days,” she said.

The fires have forced oil and gas firms to cut at least 319,000 barrels of oil equivalent per day (boepd) production, or 3.7% of the country’s total output.

Consultancy firm Rystad Energy has estimated nearly 2.7 million barrels per day (bpd) of Alberta oil sands production in May is at risk in “very high” or “extreme” wildfire danger rating zones.

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