Commodity Trading Tips for Natural Gas by KediaCommodity

Ajay Kumar Kedia 28 August 2014

Natural-Gas Naturalgas settled down -0.54% at 241.40 on profitbooking ahead of Inventory due on Thursday while prices gained earlier in the day prices rose amid expectations that seasonably warm temperatures will hike demand for the commodity at the nation's thermal power plants as households crank up their air conditioning. Updated weather forecasting models showed that above-normal temperatures will blanket most parts of the eastern and central U.S. through September 4, before giving way to more seasonal readings across most of the country. 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 79 billion cubic feet in the week ending August 22. Inventories rose by 65 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 58 billion cubic feet. Injections of gas into storage have surpassed the five-year average for 18 consecutive weeks, alleviating concerns over tightening supplies. Total U.S. natural gas storage stood at 2.555 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 17.3% from 18.9% a week earlier and down from a record 54.7% at the end of March. Technically market is under long liquidation as market has witnessed drop in open interest by -6.37% to settled at 5537 while prices down -1.3 rupee, now Naturalgas is getting support at 238.5 and below same could see a test of 235.7 level, And resistance is now likely to be seen at 244.4, a move above could see prices testing 247.5.