Commodity Trading Tips for Natural Gas by Kedia Commodity

Ajay Kumar Kedia 30 July 2013

Naturalgas yesterday settled down -2.21% at 208.20 extended losses into Monday after updated weather forecasts continued to call for milder temperatures staying put across much of the eastern half of the U. S. Milder temperatures send prices falling on sentiments that demand for the commodity will decrease at the country's thermal power plants as fewer businesses and households crank up their air conditioning. Weather forecasting services called for normal to even cooler-than-normal temperatures across much of central and eastern reaches of the country, which sent prices falling. MDA Weather Services issued a forecast earlier calling for below-normal temperatures for much of U. S. through Aug. 12., which sent prices falling in afternoon trading on Monday. Meanwhile, markets continued to digest Thursday's supply data, though most investors tracked weather forecasts on sentiments that a recent heat wave had already been priced into trading. The U. S. EIA said in its weekly report that natural gas storage in the U. S. in the week ended July 19 rose by 41bcf, below market expectations for an increase of 46bcf. Total stocks now stand at 2.786tcf, down 399bcf from last year at this time and 46bcf below the five-year average the report said. The report showed that in the East Region, stocks were 120bcf below the five-year average, following net injections of 25bcf. Stocks in the Producing Region were 45bcf above the five-year average of 980bcf after a net injection of 12bcf. Technically market is under fresh selling as market has witnessed gain in open interest by 4.02% to settled at 13160 while prices down -4.7 rupee, now Naturalgas is getting support at 204.8 and below same could see a test of 201.4 level, And resistance is now likely to be seen at 212.1, a move above could see prices testing 216.