Commodity Trading Tips for Natural Gas by KediaCommodity

Ajay Kumar Kedia 4 September 2014

Natural-Gas Naturalgas settled down -2.18% at 233.20 edged lower on Wednesday after weather forecasting models continued to call for milder temperatures to move across the U.S. this weekend, which should cut into the need for air conditioning and thus reduce demand for the commodity at the nation's thermal power plants. Updated weather forecasting models predicted earlier that seasonably warm weather in the Midwest and eastern U.S. over the next few days should give way to cooler temperatures from Sept. 7 through Sept. 16. Natural gas prices jumped higher last week, rising above the $4 level for the first time since mid-July as higher-than-average temperatures bolstered the demand outlook. Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Meanwhile, the U.S. Energy Information Administration’s weekly storage report slated for release on Thursday is expected to show an increase of 70 billion cubic feet in the week ending Aug. 29, while the five-year average change is a build of 56 billion cubic feet. Injections of gas into storage have surpassed the five-year average for 19 consecutive weeks, alleviating concerns over tightening supplies. Total U.S. natural gas storage stood at 2.630 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 17% from 17.3% a week earlier and down from a record 54.7% at the end of March. Technically market is under fresh selling as market has witnessed gain in open interest by 26.47% to settled at 9308 while prices down -5.2 rupee, now Naturalgas is getting support at 231.1 and below same could see a test of 229 level, And resistance is now likely to be seen at 236.9, a move above could see prices testing 240.6.