Natural Gas Gains Amid a Bigger-Than-Expected Storage Forecasts for Colder Weather

  • Commodities Analysis

Natural Gas yesterday settled up by 0.55% at 276.5 amid a bigger-than-expected storage withdrawal last week and forecasts for colder weather and more heating demand over the next two weeks. The U.S. Energy Information Administration (EIA) said utilities pulled 136 billion cubic feet (bcf) of gas from storage during the week ended Dec. 24. The total U.S. consumption of natural gas fell for the second week in a row, by 1.4% compared with the previous report week. For two consecutive weeks, natural gas consumption fell in all sectors except power generation, where consumption was relatively flat, rising less than 1% week over week.  
 
Data provider Refinitiv estimated 462 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, higher than the 30-year normal of 441 HDDs for this time of year. HDDs, used to estimate demand to heat homes and businesses, measure the number of degrees a day's average temperature is below 65 Fahrenheit (18 Celsius). Preliminary data from Refinitiv showed output in the U.S. Lower 48 has averaged 97.4 billion cubic feet per day (bcfd) so far in December, which would top November's monthly record of 96.5 bcfd.  
 
Technically market is under short covering as the market has witnessed a drop in open interest by -7.65% to settled at 10859 while prices up 1.5 rupees, now Natural gas is getting support at 268.6 and below same could see a test of 260.6 levels, and resistance is now likely to be seen at 281.5, a move above could see prices testing 286.4.  
 
Trading Ideas:
# Natural gas trading range for the day is 260.6-286.4.
# Natural gas gained amid a bigger-than-expected storage withdrawal last week and forecasts for colder weather and more heating demand over the next two weeks.
# The U.S. EIA said utilities pulled 136 billion cubic feet (bcf) of gas from storage during the week ended Dec. 24
# The total U.S. consumption of natural gas fell for the second week in a row, by 1.4% compared with the previous report week.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100

Related Articles