Commodity Trading Tips for Natural gas by KediaCommodity

Ajay Kumar Kedia 15 January 2014

Naturalgas settled up 2.68% at 268.5 amid growing speculation that a recent blast of arctic air will take its toll on inventories. Early withdrawal estimates for this Thursday's storage data range from 222 billion cubic feet to 303 billion cubic feet. The five-year average change for the week is a decline of 159 billion cubic feet. The largest drop on record is a decrease of 285 billion cubic feet in the seven days ended December 13, Energy Information Administration data show. Natural gas supplies fell by 157 billion cubic feet last week to hit 2.817 trillion cubic feet, approximately 16% below last year's unusually high level and nearly 10% below the five-year average for this time of year. Meanwhile, updated weather forecasting models called for below-normal temperatures in the week ahead. MDA Weather Services forecast cold weather will move into the eastern half of the country in the next six-to-ten days and edge out mild mercury readings currently in place. In its 8-14 day outlook, Natgasweather. com predicted cold air to push across the central and eastern U. S. in the third week of January followed by reinforcing blasts of cold air crossing the Midwest and the Plains states before heading east. The number of rigs drilling for natural gas in the U. S. fell by 15 to 357 rigs this week, data from Baker Hughes showed. The count, however, remains above the 18-year low of 349 rigs hit in late June 2013. Technically market is under fresh buying as market has witnessed gain in open interest by 9.69% to settled at 12506 while prices up 7 rupee, now Naturalgas is getting support at
264.5 and below same could see a test of 260.6 level, And resistance is now likely to be seen at 270.8, a move above could see prices testing 273.2.