Commodity Trading Tips for Natural gas by KediaCommodity

Ajay Kumar Kedia 20 February 2014

Naturalgas settled up 11.33% at 379.20 rallied to the highest settlement in more than five years as the latest U. S. weather forecasts called for more severe cold, fueling worries about already tight supplies. Forecasters continue to call for below-normal temperatures after record-cold weather in January led to steep draws in underground stocks of natural gas to meet heating demand, leaving less gas to meet summer electric power demand. Temperatures in Chicago will reach sub-zero at the end of next week while New York temperatures will reach into the teens, according to the MDA forecast. Total U. S. natural gas storage stood at 1.686tcf as of last week, the lowest for this time of year since 2004. Stockpiles of the fuel are likely to finish below 1tcf by the last week of March, the formal end of the winter heating season, for the first time since 2003. Natural gas inventories have fallen sharply since November as frigid temperatures and heavy winter snow in the U. S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes. According to weather service provider MDA Weather below-normal temperatures are expected in the six- to 10 -day outlook "not only over the mid-continent but now well into the South and East." 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. Technically market is under fresh buying as market has witnessed gain in open interest by 19.02% to settled at 19023 while prices up 38.6 rupee, now Naturalgas is getting support at 355.2 and below same could see a test of 331.3 level, And resistance is now likely to be seen at 392.2, a move above could see prices testing 405.3.