Natural Gas Markets To Take Support At Rs.157.3

Natural gas trading range for the day is 154.33-164.33. Market is looking to take support at 157.3, a break below could see a test of 154.3 and resistance is likely to be seen at 162.3, a move above could see prices testing 164.3. Stockpiles rose to 60% above the five-year average in March, after a mild winter cut demand for natural gas to heat homes and businesses, sparking fears that supplies would exceed available storage capacity by the end of the year.

Natural gas yesterday traded with the negative node and settled -0.87% down at 160.20 down for the fifth consecutive session, as forecasts for cooler temperatures dampened the outlook for gas-powered electricity consumption.

The Energy Information Administration said that Natural gas in storage grew by 28bcf to 3.217tcf for the week ended July 27.

Temperatures across much of the US are seen to be pulling back from higher than average levels hit earlier this summer. Warmer than normal temperatures increase the need for gas-fired electricity to power air conditioning, boosting demand for natural gas.

Natural gas accounts for about a quarter of US electricity generation. A bout of hot weather across much of the US over the past several weeks had prompted power generators to burn more of the fuel to meet demand, easing a storage glut and pushing prices to the highest levels of 2012.

MCX Crude Oil prices could test Rs. 5130
Crude trading range for the day is 5016-5130. Technically market is getting support at 5049 and below could see a test of 5016 level, and resistance is likely to be seen at 5106, a move above could see prices testing 5130.

Crude oil traded in the range and settled at 5082 but slipped in international as investors looked ahead to a speech by Fed later in the session, after US jobs data on Friday kept alive speculation over the possibility of further monetary stimulus.

Nymex Crude oil prices gained around 1 percent yesterday taking cues from optimistic statement of German Chancellor Angela Merkel’s that it will back the European Central Bank’s (ECB) bond-buying plan. Additionally, a weaker DX along with positive global market sentiments also supported upside in the Crude oil prices.

Crude prices touched an intraday high of $92.33/bbl and closed at $92.20/bbl in yesterday’s trading session. On the domestic bourses, prices increased by 0.2 percent and closed at Rs.5,082/bbl after touching an intraday high of Rs.5095/bbl on Monday. However, appreciation in the Indian Rupee capped sharp upside movement in the prices.

Meanwhile in Europe, doubts began to build whether the ECB will pull off plans to reactivate a bond-buying plan that would lower yields in Spanish and Italian bond markets. Investors took a wait and see attitude, opting to sit on the sidelines to see if policymakers actually sign off on the plan and if it will be effective.