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Intra-day traders are advised to sell natural gas below178 with stop loss of 180 and wait for the target near 176 and 174 for the day.

01 Feb 2013

By Ankush Kumar Jain
Natural gas futures opened in negative territory in the morning session but recovered from lower levels and is trading on a positive note.

Sharp loss was seen in yesterday's trading session after the report from the US Energy Information Administration showed that natural gas supplies fell less than expected last week. But it recovered at the end of the session amid cooler weather forecasts for the next few weeks for major US regions.

Intra-day outlook

On daily charts MCX natural gas for February delivery looks sideways. The expected trading range of the commodity is 175-180, and breakout to any of the sides would give clear direction for the day.

Intra-day traders are advised to sell natural gas below178 with stop loss of 180 and wait for the target near 176 and 174 for the day.

Short -Medium term outlook

If natural gas futures today closes above 180 only then it would be a trend reversal indication and subsequently it may move upside to 190 levels.

Those traders who are bullish on natural gas prices are advised to take a long position only close above 180 with stop loss of 175 and wait for the target near 190.

On India's MCX, natural gas for delivery on February was seen trading at Rs.180. /mmBtu, a gain of 1.01% as of 05.55 PM IST.

On the NYMEX, natural gas futures for delivery on March was spotted trading at $3.360/ Mmbtu a gain of $0.21 or 0.63% as of 05.58 PM IST.

Meanwhile in its latest report Barclays has said that the pace of production growth of US natural gas continued to slow in November 2012 in line with expectations. Lower-48 gross withdrawals were up 1.4 Bcf/d y/y in November compared with 1.6 Bcf/d y/y growth in October 2012. Production has risen by an average of 3.6 Bcf/d y/y in the first eleven months of the year.

On a month-to-month basis, gross withdrawals of natural gas from the Lower-48 increased 410 MMcf/d in November 2012, significantly less than pipeline scrapes were indicating. This is the second month in a row where pipeline scrapes have overestimated the growth of production, according to Barclays.

The bulk of the growth came from "other states”, while Louisiana posted its fifth consecutive monthly decline, reflecting falling Haynesville output. Production in Texas was nearly unchanged, after falling 340 MMcf/d m/m in October.(Ankush Kumar Jain is Research Analyst, Commodity Online)

Reach Commodity Online at its phone number:079 40275050

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