Commodity Trading Tips for Natural Gas by KediaCommodity

Natural-GasNaturalgas settled up 7.37% at 333.60 soared after updated weather forecasts downplayed recent calls for a warming trend across portions of the eastern U.S. and instead call for fresh blasts of wintry weather and below-normal temperatures that should prompt households and business to ramp up heating. Updated weather forecasting models called for bitter cold weather across the U.S. during the next three-to-five days, with heavy snow expected in the Northeast and Midwest, edging out previous forecasts for a thawing trend. Below-normal temperatures could grip much of the lower 48 states through the middle of February, which sparked a natural gas rally on sentiments demand will rise at the nation's thermal power plants. Meanwhile, U.S. supply levels also remained in focus. Total U.S. natural gas storage fell by 230bcf last week to 2.193tcf, approximately 17% below the five-year average for this time of year. Meanwhile, U.S. supply levels also remained in focus. Natural gas inventories have fallen by nearly 40% since November 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. Market expect supplies at the end of the winter heating season in March to be at their lowest in six years. Wall Street investment bank Goldman Sachs lowered its forecast for inventory levels at the end of March to 1.39tcf, driven by the recent “polar vortex.” Goldman had previously estimated U.S. gas inventories at 1.61 trillion by the end of March. Technically market is under fresh buying and getting support at 318.8 and below same could see a test of 303.9 level, And resistance is now likely to be seen at 342, a move above could see prices testing 350.3.

Trading Ideas:

Naturalgas trading range for the day is 303.9-350.3.

Natural gas gained as a spreading winter storm in the U.S. Northeast boosted demand for the heating fuel.

U.S. gas inventories may drop to 1,198 billion cubic feet from a previously estimated 1,388 billion by the end of March.

The lower stockpile expectation is “largely driven by colder-than-average temperature forecasts for the first half of February.”