Natural Gas Dropped By -1.68%, Show An Increase
CommodityOnline | Jun 19, 2014 07:18AM ET
Naturalgas settled down -1.68% at 280.40 slipped Wednesday on expectations that weekly government storage data will show a larger than average increase for this time of year. Prices wavered throughout the day as traders assessed forecasts for hot temperatures in July, which could increase demand for gas-powered electricity to fuel air conditioners.
However, midday forecast updates suggested that next week's weather will be cooler than this week's. Early injection estimates for this week’s storage data, due out on Thursday, range from 90bcf to 105bcf. Stockpiles increased by 92bcf in the same week a year earlier, while the five-year average build for the week is 87 billion.
Total U.S. natural gas storage stood at 1.606 trillion cubic feet as of last week, nearly 31% below their level this time last year and 35% below the five-year average. Producers would need to add approximately 2.6 trillion cubic feet to storage by November 1 to meet typical winter demand.
Meanwhile, updated weather-forecasting models continued to call for warm weather over the central and eastern U.S. over the next five days, which investors have largely priced into trading. In its June 18-24 daily weather forecast, Natgasweather.com reported that cooler temperatures may make their appearance later this week, though they spread wide enough to make a dent in demand for air conditioning.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.Technically market is under long liquidation as market has witnessed drop in open interest by -1.64% to settled at 6008,now Naturalgas is getting support at 277.3 and below same could see a test of 274.1 level, And resistance is now likely to be seen at 286.2, a move above could see prices testing 291.9.
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