Natural gas yesterday traded with the negative node and settled -0.08% down at 123.8 edging off early with weaker crude despite some cool weather in consuming regions of the nation and recent production cuts.
Chesapeake said it had already cut more than 500 million cubic feet per day of output and said it may increase volume cuts to as much as 1 billion cubic feet per day.
High gas production, primarily from shale, has pressured gas prices for the last couple of years, but with storage at record highs the focus has shifted to the huge inventory surplus building, which could turn out to be an even bigger problem for prices in 2012.
Futures prices soared more than 5 percent on the news, after initially selling off on data from the U.S. Energy Information Administration showing total gas inventories fell last week by 78 billion cubic feet to 2.888 trillion cubic feet.
With production still running at all-time highs and inventories likely to end winter at a record high, most traders remain cautious about any upside without much colder weather to kick up heating demand.
In yesterday's trading session Natural Gas has touched the low of 123.5 after opening at 124, and finally settled at 123.8.
For today's session market is looking to take support at 123.5, a break below could see a test of 123.2 and where as resistance is now likely to be seen at 124.1, a move above could see prices testing 124.4.
Trading Ideas:
Nat.Gas trading range for the day is 123.2-124.4.
Natural gas settled flat edging off early with weaker crude despite some cool weather in consuming regions
Chesapeake said it had already cut more than 500 million cubic feet per day of output and said may increase volume cuts
Production still running at all-time highs and inventories likely to end winter at a record high
Courtesy: Kedia Commodities
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