Canadian spot gas falls again on supplies, weather

CALGARY, Alberta (Reuters) - Canadian spot natural gas prices fell again on Friday, their fifth-straight drop, as robust supplies and moderate temperatures in key markets pulled prices to their lowest level in more than three months.

Spot gas at the AECO storage hub in southeastern Alberta averaged C$8.52 a gigajoule, down 42 Canadian cents from Thursday. It was the lowest price since April 8, when it stood at C$8.51 per GJ.

Deals were done in a range between C$8.45 and C$8.76 a GJ.

Canadian spot gas prices have fallen 23 percent since the end of June as supply fears moderate and the hurricane season has so far failed to produce a storm that could threaten producing areas in the Gulf of Mexico.

Weakening crude oil prices over the past four days, bearish inventory data and concerns about the softening U.S. economy have also served to check natural gas.

Forecasters called for Toronto temperatures to be a few degrees cooler than the 27 Celsius (81 Fahrenheit) average for most of the next four days, according to Environment Canada's website, with highs topping at 24C (75F) on Monday.

After a late-week heat wave, AccuWeather.com expects temperatures in the U.S. Northeast and Midwest, key gas consuming regions, to moderate to near normal or slightly below late this week and next week, with highs mostly in the upper 20s Celsius (low to mid-80s Fahrenheit).

The U.S. National Weather Service eight- to 14-day outlook on Thursday called for above normal temperatures for most of the northern half of the country, with seasonal or below seasonal readings expected for Southern and West Coast states.

The August natural gas contract on the New York Mercantile Exchange edged 3.3 cents higher, to $10.57 per million British thermal units, with concerns about tropical activity in the Caribbean prompting some pre-weekend short covering in front months despite softer cash prices traders said.

The U.S. National Hurricane Center said on Friday that a low pressure system northwest of Aruba could turn into a tropical depression at any time.

But most weather models show the system moving northwest, across Mexico's Yucatan Peninsula and then towards the central or northern Mexico coast.

Supplies on Alberta's main pipeline system were 14.25 billion cubic feet, more than 200 million cubic feet above the target rate, according to pipeline operator TransCanada Corp . Producers delivered 10.84 bcf to the system and 97 mmcf was placed into storage in the province.

Canadian export prices fell. Spot gas at Niagara, Ontario, most of which is shipped to the U.S. Northeast, averaged $10.83 per mmBtu, down 66 cents.

Gas at Huntingdon-Sumas on the British Columbia-Washington state border dropped 57 cents to average $9.05 per mmBtu.

(Reporting by Scott Haggett; editing by Rob Wilson)