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Natural Gas may trade in a range between 195.6-213
Commodity Online | November 15 2017
UPDATED 10:38:31 IST

Mentha Oil market under long liquidation; Support seen at 1688

Aluminium market is under short covering; Support seen at 146.9

Nickel market under short covering; Support seen at 923.9

Zinc market under short covering; Support seen at 177.7

Copper market under fresh buying; Support seen at 444.7

Technically now Naturalgas is getting support at 199.5 and below same could see a test of 195.6 levels and resistance is now likely to be seen at 208.2, a move above could see prices testing 213.

Natural Gas on MCX settled down 3.47% at 203.30 slammed lower but rebounded near support, as colder than normal weather is forecast to cover most of the United States for the next 8-14 days according to the most recent estimate from the National Oceanic Atmospheric Administration.

Cooler weather boosts demand for natural gas. While winter hasn't even begun and natural gas is already spiking. Prices jumped sharply last week, as fundamental concerns about an arctic blast and future winter weather squeezed shorts. They are likely to rise further through the end of the year and into 2018.

The cold weather has been accompanied by a relative deficit of natural gas inventory. This surge in perceived demand along with tight supply triggered a technical breakout of prices to the upside. Prices have been held back in recent years by the shale revolution. Shale natural gas wells can bring on small amounts of gas quickly.

As a result, natural gas has become a bit more like an agricultural commodity: It is driven by weather dynamics, and some short-term incremental, additional supplies are easier to bring online than they had been when supplies were dominated by large conventional asset plays.

Of course, there are some limitations to the price-dampening impact of shale natural gas wells, because these have steep decline curves. This means that the gas can also be gone relatively quickly from new wells. Now market participants looked ahead to this week's storage data due on Thursday, which is expected to show a draw in a range between 3 and 15bcf in the week ended Nov 10.

Trading Ideas:
--Natural Gas trading range for the day is 195.6-213.
--Natural Gas prices dropped -3.47% slammed lower despite colder than normal weather is forecast to cover most of the US.
--A strong weather system with subfreezing temperatures will track this week and next weekend for another round of stronger demand.
--Demand for gas will jump about 45% through 2040, driven by industrial users in Asia, Africa, Latin America and the Middle East-IEA said.

Courtesy: Kedia Commodities

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