Commodity Trading Tips for Natural Gas by KediaCommodity

Ajay Kumar Kedia 14 August 2014

Naturalgas settled down -4.19% at 235.50 dropped on Wednesday after investors locked in gains from a recent heat wave and sold the commodity for profits, jumping to the sidelines ahead of the release of Thursday's weekly supply report. A heat wave trekking across the U. S. has sent natural gas prices rising in recent sessions, as investors bet higher temperatures will prompt households to crank up their air conditioning. By Wednesday, investors sold for profits ahead of the Thursday release of the U. S. EIA's weekly supply report. Markets are expecting an increase of 81bcf in the week ending Aug. 8. Inventories rose by 70bcf in the same week a year earlier, while the five-year average change is a build of 45bcf. Injections of gas into storage have surpassed the five-year average for 16 consecutive weeks, alleviating concerns over tightening supplies. Total U. S. natural gas storage stood at 2.38tcf as of last week, narrowing the deficit to the five-year average to 20% from 21.7% a week earlier and down from a record 54.7% at the end of March. While showers and thunderstorms may cool off parts of the U. S. this week, a heat wave will hold its ground through the third week in August. "Weather systems over the northern U. S. early in the outlook will lead to cooler than normal temperatures over many regions. However, high pressure will strengthen after August 20th and bring a nice warm up to much of the U. S.," Natgasweather. com said in its outlook. Technically market is under fresh selling as market has witnessed gain in open interest by 16.85% to settled at 9020. Naturalgas is getting support at 231.6 and below same could see a test of 227.8 level, And resistance is now likely to be seen at 242.2, a move above could see prices testing 249.