Commodity Trading Tips for Natural Gas by Kedia Commodity

Ajay Kumar Kedia 2 August 2013

Naturalgas yesterday settled down -1.94% at 206.70 tumbling to the lowest level since February after a report from the US Energy Information Administration showed that natural gas supplies rose more-than-expected last week. Market participants also continued to focus on near-term weather forecasts to gauge the strength of demand for the fuel. The US Energy Information Administration said in its weekly report that natural gas storage in the US in the week ended July 26 rose by 59bcf, above market expectations for an increase of 56bcf. Inventories rose by 28bcf in the same week a year earlier, while the five-year average change for the week is a build of 47bcf. Total US natural gas storage stood at 2.845 trillion cubic feet as of last week. Stocks were 368bcf less than last year at this time and 34bcf below the five-year average of 2.879tcf for this time of year. The report showed that in the East Region, stocks were 119bcf below the five-year average, following net injections of 44bcf. Stocks in the Producing Region were 55bcf above the five-year average of 979bcf after a net injection of 9bcf. Meanwhile, weather forecasting models continued to point to cooler temperatures across much of the US Northeast and Midwest over the next six-to-ten-days, dampening summer cooling demand for the fuel. Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Technically market is under fresh selling as market has witnessed gain in open interest by 1.27% to settled at 12210 while prices down -4.1 rupee, now Naturalgas is getting support at 203.40 and below same could see a test of 200.20 level, And resistance is now likely to be seen at 210.10, a move above could see prices testing 213.60.