Commodity Trading Tips for Natural gas by KediaCommodity

Ajay Kumar Kedia 21 February 2014

Naturalgas settled up 1.85% at 386.20 but dropped from 395 level on profit taking sent natural gas futures edging lower after weekly U. S. supply data largely met expectations, giving investors reason to lock in gains stemming from recent blasts of wintry weather and sell the commodity for profits. The U. S. EIA said in its weekly report that natural gas storage in the U. S. in the week ended February 14 fell by 250bcf, compared to expectations for a decline of 251bcf. The number sparked profit taking, especially among investors speculating for a more bullish stockpile report. Natural gas supplies fell by 127bcf in the same week a year earlier. Total U. S. natural gas storage stood at 1.443tcf. Stocks were 975bcf less than last year at this time and 741bcf below the five-year average of 2.184tcf for this time of year. The report showed that in the East Region, stocks were 364bcf below the five-year average, following net withdrawals of 129bcf. Stocks in the Producing Region were 277bcf below the five-year average of 806bcf after a net withdrawal of 91bcf. 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 demand a higher than normal amount of the fuel in furnaces to heat their homes. Technically market is under short covering as market has witnessed drop in open interest by -21.28% to settled at 14974 while prices up 7 rupee, now Naturalgas is getting support at 369.7 and below same could see a test of 353.2 level, And resistance is now likely to be seen at 399.1, a move above could see prices testing 412.