Commodity Trading Tips for Natural gas by KediaCommodity

Ajay Kumar Kedia 23 January 2014

Naturalgas settled up 5.85% at 289.30 rallied to a two-and-a-half-year high on Wednesday, boosted by forecasts for freezing winter temperatures and heavy snow across most parts of the U. S. Northeast and the mid-Atlantic states. Updated weather forecasting models called for severe cold weather across the eastern U. S. during the next three-to-five days, with heavy snow expected in the Northeast and New England. Cities in the Northeast could get 8 to 10 inches of snow with gusty winds and ice cold temperatures, while across the country temperatures will plummet each day through Sunday. The U. S. Northeast is a key gas-heating area. Bullish speculators are betting that colder weather will increase demand for the heating fuel. The heating season from November through March is the peak demand period for U. S. gas consumption. Approximately 52% of U. S. households use natural gas for heating, according to the Energy Department. U. S. supply levels also remained in focus. Natural gas supplies dropped by a record-high 287bcf last week to 2.530tcf, approximately 15% below the five-year average for this time of year. The previous record drop was a decrease of 285bcf in the seven days ended December 13, EIA data show. Natural gas inventories have fallen by 1.3tcf, or 34%, since November 8 as frigid winter temperatures in the U. S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes. Technically market is under fresh buying as market has witnessed gain in open interest by 13.73% to settled at 17148 while prices up 16 rupee, now Naturalgas is getting support at 279.2 and below same could see a test of 269.1 level, And resistance is now likely to be seen at 294.7, a move above could see prices testing 300.1.