Natural gas Storage report - EIA storage report released March-14

This week NG futures on MCX started with a dull movement retesting its major support at 192.50.

Wednesday was a recovery day where we encountered NG futures trading in green area. 

Today morning NG futures on MCX showed a bit of strength and market was seen trading around 198.

With Natural Gas edging 1% higher this morning, it is clear that traders are bullish and higher withdrawals are expected.

Weather forecast

According to NatGasWeather for March 14 to March 20, “Temperatures will be warm across the South Great Lakes and East the next couple days with highs of 50s to 70F for Chicago today and New York City on Friday. Overall, national demand will ease to moderate-low late this week, then back to high late this weekend.”

NatGasWeather also said, “The data continues to advertise cold returning over all regions east of the Plains this weekend through next week, followed by mild to warm conditions dominating most of the country March 23-27, and it’s increasingly likely warmth will persist through the end of the month.”


EIA Storage report released today

Traders were expecting a bullish report for NG storage and market was supporting prices since morning but release of EIA Storage report lead to consolidation. Prices were showing strength but bullish traders might have to think before counting on the current rally.

Major surveys had pointed to a withdrawal in the 208-210 Bcf range, and some estimates approached 220 Bcf. Intercontinental Exchange EIA financial weekly index futures had settled on a pull of 205 Bcf, while NGI’s model had predicted a 222 Bcf withdrawal. Bespoke Weather Services had been looking for a 209 Bcf pull and viewed this week’s EIA report as neutral.

Based on the report released today, Working gas in storage was 1,186 Bcf as of Friday, March 8, 2019, according to EIA estimates. This represents a net decrease of 204 Bcf from the previous week.

The withdrawals were slightly less or in-line with the expectations which lead to consolidation of prices. Traders will now be looking at profit booking and observing NG weather for last week of March

Price forecast

I expect NG futures to trade in a range for upcoming sessions. This range will be from 192 to 201 on MCX. Positional traders are advice to look at short position at 201, add more at 204 for target of 192 in upcoming sessions.

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