Natural gas yesterday traded with the negative node and settled -1.28% down at 187.1 pared losses bouncing off a four-day low as the previous session’s steep decline created bargain buying opportunities for investors ahead of Thursday’s closely-watched storage report.
Prices were pressured by forecasts calling for mild weather across most parts of the US through mid-November.
The sharp decline triggered some bargain buying from traders reluctant to bet that prices would fall further with winter’s heating season fast approaching. Meanwhile, markets were looking forward to the US EIA’s weekly report on US natural gas stockpiles for the week ended October 28 on Thursday. Early injection estimates range from 59bcf to 87bcf.
The five-year average stockpile change for the week is an increase of 35bcf, according to US Energy Department data. Supplies climbed by 67bcf in the same week a year earlier.
But this year's increase, aided by unusually warm temperatures, offers a much larger cushion than in most years as winter approaches. Meanwhile, industry weather group MDA Federal said Tuesday that temperatures along the US East Coast were expected to be warmer-than-normal through mid-November, with the normal average temperature in New York estimated at 51 degrees Fahrenheit.
For today's session market is looking to take support at 185.3, a break below could see a test of 183.6 and whereas resistance is now likely to be seen at 188.8, a move above could see prices testing 190.6.
Trading Ideas:
Natural Gas trading range is 183.6-190.6.
Natural gas dipped bouncing off a 4days low decline created bargain buying opportunities for investors ahead of inventory.
Decline seen as traders reluctant to bet that prices would fall further with winter’s heating season fast approaching.
Today Natural Gas Storage inventory is expected at 71B vs 92B
Courtesy: Kedia Commodities
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