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Natural Gas Settled Flat as Forecasts for Slightly Warmer Weather

By Ajay KediaCommoditiesJan 10, 2019 11:34
in.investing.com/analysis/natural-gas-settled-flat-as-forecasts-for-slightly-warmer-weather-over-the-next-we-200207024
Natural Gas Settled Flat as Forecasts for Slightly Warmer Weather
By Ajay Kedia   |  Jan 10, 2019 11:34
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Natural gas on MCX settled down -0.52% at 211.20 traded in the range while Natural gas prices whipsawed attempting to move higher but running into resistance.

A warmer than normal forecast for the next 6-14 days from the NOAA is undermining prices. While inventories remain below the 5-year average range for this time of year, the trajectory is becoming less negative, which is allowing prices to remain subdued. The top end of the 5-year average price range is $6.49 per mmbtu.

The EIA recently reported that withdrawals from working gas storage are lower than the five-year average for the second week in a row. Net withdrawals from storage totalled 141 Bcf for the week compared with the five-year average net withdrawals of 144 Bcf and last year’s net withdrawals of 166 Bcf during the same week.

Working gas stocks totalled 2,773 Bcf, which is 720 Bcf lower than the five-year average and 697 Bcf lower than last year at this time. Working gas stocks’ deficit to the five-year average decreased, according to the EIA, and the deficit to the bottom of the five-year range increased. In the Lower 48 states, total working gas stocks are 450 Bcf lower than the five-year minimum, and every storage region is currently lower than the bottom of its five-year range. The weather is the only thing keeping prices capped. A strong cold front will push across the Great Lakes and Northeast the next several days with lows behind the cold front reaching the 0s to 20s for strong demand.

Technically now Natural gas is getting support at 208.1 and below same could see a test of 205 level, And resistance is now likely to be seen at 214, a move above could see prices testing 216.8.
Trading Ideas:

  • Natural gas trading range for the day is 205-216.8.
  • Natural gas settled flat as forecasts for slightly warmer weather over the next week offset predictions of colder weather later in January.
  • Meteorologists said the weather would remain mostly warmer than normal to seasonally cold through Jan. 19 before turning much colder than usual for the next week.
  • The warmth expected this week should allow utilities to keep reducing the vast storage deficit by leaving more fuel in underground storage facilities.
Natural Gas Settled Flat as Forecasts for Slightly Warmer Weather
 
Natural Gas Settled Flat as Forecasts for Slightly Warmer Weather

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