Commodity Trading Tips for Natural Gas by Kedia Commodity

Ajay Kumar Kedia 19 August 2013

Naturalgas settled up 0.38% at 212.30 last week as rupee weakness supported the prices while weakness seen in NYMEX prices as traders sold the commodity after revised weather forecasts pointed to cooler temperatures across most parts of the US for the rest of August. Forecasts originally called for warmer-than-average weather during the period. Natural gas came under pressure after some weather forecasts were adjusted for cooler temperatures for the remainder of August. Private weather forecaster MDA said Friday that cool weather was expected to return to the upper US Midwest and Northeast "over the final couple days" of the next six-to-10-day period. Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Meanwhile, market players shrugged off the threat of supply disruptions from tropical storms in the Gulf of Mexico. Erin, the fifth named storm of the 2013 Atlantic hurricane season, weakened to a tropical depression on Friday. Offshore Gulf of Mexico gas output plays a much smaller role in supplying the nation than in recent years. Production in federal waters in the Gulf currently accounts for only 6% of natural gas output, down significantly from 17% in 2005. Nymex gas futures rallied on Thursday after a report from the US EIA showed that natural gas supplies rose less-than-expected last week. The US EIA said that natural gas storage in the US rose by 65bcf last week, below market expectations for an increase of 70bcf. Inventories rose by 20bcf in the same week a year earlier, while the five-year average change for the week is a build of 42bcf. Technically market is getting support at 211 and below same could see a test of 209.8 level, And resistance is now likely to be seen at 213, a move above could see prices testing 213.8.