Natural gas yesterday traded with the positive node and settled 1.29% up at 178.5 on shortcovering ahead of Thursday's storage data lifts prices, after two straight losing sessions and ahead of Thursday's inventory report despite concerns about steadily growing supplies.
It looks like the shorts are taking profits ahead of the EIA storage number, and the weather looks a little supportive, but there's still a lot of gas out there.
AccuWeather expects temperatures in the Northeast to vary on either side of normal for the next 10 days, while the Midwest will see mostly below-seasonal readings for the period. Traders said the cooler extended outlook should translate into more space heating demand and help underpin prices.
Despite modest rebound, most traders expect any upside to be difficult to sustain until colder weather stirs more heating load, with inventories comfortable, production at record highs and demand struggling in a weak economy. Traders agreed expectations for a triple-digit storage build have weighed on sentiment this week.
The next US EIA gas inventory report on Thursday is expected to show that storage climbed 110bcf last week. For today's session market is looking to take support at 175.9, a break below could see a test of 173.2 and where as resistance is now likely to be seen at 180.3, a move above could see prices testing 182.
Trading Ideas:
Natural Gas trading range is 173.2-182.
Natural gas ended up on shortcovering ahead of inventory report despite concerns about steadily growing supplies.
Gas prices often hit a seasonal bottom in October, then climb as traders focus ahead to winter heating season.
US EIA gas inventory report on Thursday is expected to show that storage climbed 110bcf last week.
Courtesy: Kedia Commodities
Get Trading Tips that suits your profile and budget
