Commodity Trading Tips for Natural Gas by KediaCommodity

Ajay Kumar Kedia 17 July 2014

Naturalgas settled up 0.4% at 249.10 regained strength on Wednesday, as traders anticipate increased demand from power generators that have new incentives to switch away from coal. Mild weather and high natural-gas prices this summer so far have encouraged operators of power plants to keep burning coal, which allowed a rapid build-up in gas supplies. However, after falling 14% since hitting a one-month high on June 12, gas prices are low enough for the fuel to be competitive with coal again. Natural gas prices have been under pressure in recent sessions after updated weather-forecasting models called for cooler temperatures across most parts of the heavily-populated Midwest and Northeast regions over the next five days. Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Meanwhile, investors readjusted positions ahead of Thursday’s closely-watched supply report to gauge the strength of cooling demand. This weekly’s supply data was expected to show that natural gas storage in the U.S. rose by 100bcf in the week ended July 11. Total U.S. natural gas storage stood at 2.022 trillion cubic feet as of last week, 24.4% below their level this time last year and 27.5% below the five-year average. Investors also reshuffled positions ahead of Thursday’s closely-watched supply report to gauge the strength of cooling demand. This weekly’s supply data was expected to show that natural gas storage in the U.S. rose by 100bcf in the week ended July 11. Technically market is getting support at 247.6 and below same could see a test of 246.1 level, And resistance is now likely to be seen at 250.2, a move above could see prices testing 251.3.