A second consecutive weekly storage withdrawal which exceeded the 5-year average kept natural gas prices firm in today's trade although there were several intraday sell off attempts. The spot March 16 contract traded down to a $2.088/MMBtu low following release of the EIA weekly storage report but and traded as high as 2.233 finishing the day at 2.188, up .025.
Today's 211 Bcf withdrawal report this morning by the EIA came in near the upper end of pre-report estimates but the market tried to sell off anyway as total storage remains high.
With colder temperatures expected over the upcoming 10-15 days, the market may have another leg up regardless of the longer term bearish forecasts.
Current storage of 3,086 Bcf should fall to the 2,100-2,200 Bcf level by winter's end which would be the second highest end of March storage on record.
Factors which could become supportive are production which could begin a sustained decline this year due to bankruptcies in the sector, and second demand which could increase this summer with higher power generator and industrial usage of natural gas.
Near term, price weakness is expected over upcoming weeks with a probable retest of the mid-December low by early-April. For the spot market, the mid-December low was $1.684/MMBtu, over .500 below the current price. Something to think about.
Nifty has been struggling below the important mark of 9,875 level. However, it has moved up from its day’s low of 9,836 level. Immediate support in Nifty is placed at 9800 and resistance at 9900.capitalstars
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