Natural gas yesterday traded with the positive node and settled 1.47% up at 124.4 pulling back from a two-day high as ongoing concerns about record high supplies and mild early-week temperatures weighed.
Natural gas prices climbed in early trade, as forecasts for cooler weather in the Northeast and Midwest later this week boosted expectations for additional gas-fired heating demand.
But gas prices failed to hold gains amid ongoing concerns over a supply glut, with production levels running close to all-time highs and inventories likely to end winter at a record high.
Extended weather forecasts have still not show any indications of extreme cold in the coming weeks, adding to concerns that the huge inventory glut could keep prices under pressure throughout 2012.
Data from the US EIA last week showed domestic gas inventories fell by a larger-than-expected 132bcf to 2.966tcf, but inventory withdrawals this winter are still approximately 30% below average.
Despite recent declines in the gas drilling rig count and planned production cuts by major producers such as Chesapeake gas prices have continued to struggle close to the decade low of USD2.231 hit two weeks ago.
For today's session market is looking to take support at 121, a break below could see a test of 117.6 and where as resistance is now likely to be seen at 127.1, a move above could see prices testing 129.8.
Nat.Gas trading range for the day is 117.6-129.8.
Natural gas settled 1.47% up on short-covering but trend remain weak as ongoing concerns of high supplies weighed.
Natural gas prices climbed as forecasts for cooler weather in the Northeast and Midwest later this week boosted expectations.
Monthly gas production reached the 2bcf mark 7times last year, a threshold not reached in the preceding 37 years.
Natural Gas is holding with a support at 117.6 and resistance will be likely at 129.8.
Courtesy: Kedia Commodities
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