Commodity Trading Tips for Natural Gas by KediaCommodity

Ajay Kumar Kedia 17 May 2013

Natural-Gas Naturalgas yesterday settled down by -3.23% at 215.50 came under heavy selling pressure on Thursday, falling 3% after a report from the U.S. EIA showed natural gas supplies rose more than expected last week. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended May 10 rose by 99bcf, above expectations for an increase of 95bcf. Inventories rose by 30bcf in the same week a year earlier, while the five-year average change for the week is a rise of 69bcf. Total U.S. natural gas storage stood at 1.964 trillion cubic feet as of last week. Stocks were 694bcf less than last year at this time and 83bcf below the five-year average of 2.047 trillion cubic feet for this time of year. The report showed that in the East Region, stocks were 105bcf below the five-year average, following net injections of 55bcf. Stocks in the Producing Region were 29bcf below the five-year average of 825bcf after a net injection of 31bcf. Natural gas futures were lower ahead of the data as forecasts showing mostly mild weather for the rest of May continued to weigh. Prices have lost nearly 12% since futures rallied to a 21-month high of USD4.442 per million British thermal units on May 1, with some analysts warning of further losses with spring's low-demand shoulder season looming. Gas use usually hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning. Technically market is now getting support at 211.6 and below same could see a test of 207.7 level, And resistance is now likely to be seen at 222.3, a move above could see prices testing 228.5.