Natural gas Storage report - EIA storage report released Mar-21

NG futures - trading tip -
This week has been quite volatile for Natural Gas counter compared to past few weeks. Natural Gas was seen trading higher earlier this week but couldn’t break its resistance which is 200 at MCX.

We saw sellers dominating the market in this bearish season again and rally was somewhat limited. Seems like traders were not expecting EIA report to favour the prices.

Due to Holi, market was open only in evening session. International market was also bearish and so Natural Gas counter opened in red zone.

Weather forecast

According to NatGasWeather for March 21 to March 27, national demand will swing between moderate and high into next week. We can expect mild to warm weather.

EIA Storage Report released today

Analyst were expecting lighter than average withdrawals. Reuters was looking for a 48 Bcf withdrawal for the week-ended March 15. It estimated a withdrawal range of 30 Bcf to 56 Bcf. Bloomberg showed a median estimate for a 50 Bcf pull, with responses ranging from minus 42 Bcf to minus 56 Bcf. Natural Gas Intelligence’s storage model predicted a 44 Bcf withdrawal.

Based on the report released this week, working gas in storage was 1,143 Bcf as of Friday, March 15, 2019, according to EIA estimates. This represents a net decrease of 47 Bcf from the previous week.

Price forecast

I expect the market to follow a bearish trend. One should stick to sell on rise strategy. I would not advice buying in this market. Rally will be limited since the buyers are not confident about the cold weather ahead.

Also, looking at past trends we can see that NG futures have been trading in range. This range is expected to continue.

We can expect a bigger rally if prices break above 201 at MCX.

Trading tip – Adopt a sell on rise strategy with stop loss of 201.

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