Commodity Trading Tips for Natural Gas by KediaCommodity

Ajay Kumar Kedia 31 January 2014

Natural-Gas Naturalgas settled down -0.25% at 320.30 retreated from a four-year high on forecasts for milder U.S. weather and a technical indicator showing that prices were poised to fall after yesterday’s 10 percent rally. Natural gas plunged nearly 6% from the day's high after official data revealed U.S. inventories fell less than expected last week despite below-normal temperatures gripping much of the country. Recent blasts of cold air sweeping across the U.S. hiked demand for heating, though the country tapped natural gas resources a little less than markets were expecting, data revealed, which sparked a selloff. The U.S. EIA said in its weekly report that natural gas storage in the U.S. in the week ended January 24 fell by 230bcf, missing expectations for a decline of 236bcf. Gas supplies fell by 191bcf during the same week a year earlier, while the five-year average change for the week is a decline of 162bcf. Total U.S. natural gas storage stood at 2.193 tcf. Stocks were 637bcf less than last year at this time and 437bcf below the five-year average of 2.630 tcf for this time of year. The report showed that in the East Region, stocks were 269bcf below the five-year average, following net withdrawals of 124bcf. Stocks in the Producing Region were 121bcf below the five-year average of 924bcf after a net withdrawal of 84bcf. Forecasts for moderating temperatures pushed prices lower as well, as investors jumped to the sidelines to await forecasts for mid February. Technically market is under long liquidation as market has witnessed drop in open interest by -12.6% to settled at 14667 while prices down -0.8 rupee, now Naturalgas is getting support at 311 and below same could see a test of 301.8 level, And resistance is now likely to be seen at 336.6, a move above could see prices testing 353.