The Energy Information Administration (EIA) Natural Gas Storage report measures the change in the number of cubic feet of natural gas held in underground storage over the prior week.
While it is a U.S. indicator, it tends to have a larger impact on the Canadian dollar because of Canada’s large energy sector.
If the increase in natural gas inventories is more than expected, it implies weaker demand and is bearish for natural gas prices. The same can be said if a decline in inventories is less than expected.
If the increase in natural gas is less than expected, it implies greater demand and is bullish for natural gas prices. The same can be said if a decline in inventories is more than expected.
Natural gas accounts for almost a quarter of US energy consumption and is one of the most volatile commodities listed on exchanges. As the volatility comes with big rewards, it is one of the favourites among traders, investors and speculators. Now a days it has big High Low Movement which provides great opportunity for Profit in Commodity Trading.
NATURAL GAS INVENTORIES TODAY : 07/12/2017 ~~~ Previous (-33 B), Forecast (-7 B) and Actual (+2 B) that is Slight NEGATIVE FOR PRICES
While natural gas trades at different prices all over the US (and the world), speculative trading is concentrated around the Nymex delivery point, Henry Hub. Hence this commodity is immensely popular in the trading arena.
Seasonal patterns and cyclical demand are the most common features of the commodity, deciding the price trajectory. Temperature extremes have a bearing on natural gas demand.
In winter, frigid temperatures increase the demand for the commodity as heating requires natural gas. However, during summer, electricity is required for cooling.
The year 2017 (year to date) looks good fro Mcx Natural Gas Trading as it Moves from 180 to 208 high than again from 208 – 190. In Nov 190 to 202.. And Now Falling from 200+ level to CMP 183.
In contrast, since the start of the summer season in the US (April-till date), Nymex natural gas prices have risen by around 6 per cent and MCX gas prices by around 7.43 per cent.
Climatic factors :
Climate impacts lot to Natural Gas Demands and Supply.. We expecting There will be more demand in upcoming days as winter gets its power. If NG Moves near to 194++ Than may possible to touch 200+ level in upcoming days
Natural gas prices continued to slide in today’s trade after prices took a pause in yesterday’s trade as market players continued to monitor winter weather forecasts to gauge demand for the fuel. Prices extended their decline as updated weather forecasts showed a return to mild weather after a cold spell in the eastern U.S. Markets have tested these levels thrice and witnessed sharp pull backs however any close below the same prices can slide sharply. Looking ahead markets player will closely track today’s inventories scheduled to release at 9 pm IST and our bias remain weak till prices manage to trade and close below 192. Imm Sup are at 180 & 176 and Res are at 187 & 192 cmp 183.2
Increasing power burn, as discussed earlier in the report, has been offset by higher production levels, allowing for robust injection of inventories this season. Weather conditions, according to the National Oceanic and Atmospheric Administration, is going to be mild and moderate in the second half of this summer (2015) which will reduce power consumption and make more natural gas available for storage.
Besides, the EIA report states that inventories in all the natural gas producing regions will be higher than the five-year average. It also forecasts that total end-of-October stock levels will reach 3,919 bcf, which will be 3.2 per cent higher than the five-year average.
Big inventories and bearish sentiment is a perfect set up for prices to decline this summer season. So far, it has not been too hot.
The power sector, which plays a more important role this time of the year, relative to other sectors, has kept the price of natural gas at its current low level.
Unless the weather starts to Cooler up more, the injections will continue to be Lower than normal and prices will starts Up move.