Natgas prices recover after profit booking, Nymex volumes surge in Jan

Nymex Henry Hub natural gas futures prices slumped to $4.7 per MMBTU on profit booking and moderating US cold conditions but has now recovered to above $5.279 per MMBTU in electronic trading on Wednesday. At India's Multi Commodity Exchange (MCX) Nat gas futures have traded in 298.60-335.40 range with bullish trend still intact on global cues, analysts said.

Natural gas futures were likely to find support at USD4.769 per million British thermal units, Monday's low, and resistance at USD5.481, Wednesday's high.Updated weather forecasting models called for bitter cold weather across the U.S. during the next three-to-five days, with heavy snow expected in the Northeast and Midwest, edging out previous forecasts for a thawing trend

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US heating demand is expected to rise in February as below normal temperaturs could grip much of the lower 48 states- this is turn is keeping the market bullish, analysts said.Investing.com is neutral on Natgas futures but an RSI of 63.961 indicates buying while stochastics indicates oversold position. MACD in negative territory indicates selling.

Nymex volumes surge 

Meanwhile record volumes were witnessed in natural gas futures at New York Mercantile Exchange (Nymex), according to CME Group. It said average daily volume for its natural gas futures and options complex increased by 30 percent last month compared to January 2013. This provided strong support for the launch of natural gas basis markets on CME Direct, CME Group's electronic trading platform for listed and OTC energy markets.

Average daily volume (ADV) for all natural gas contracts trading on the New York Mercantile Exchange (NYMEX), including the benchmark Henry Hub Natural Gas futures contract, was 736,238 contracts a day, compared to 564,791 in January 2013, a 30 percent increase year-over-year. This is the second month of strong growth for natural gas. ADV in December 2013 was 655,121 contracts, compared to 468,186 in December 2012, an increase of 40 percent.

NYMEX natural gas options ADV in January was 210,127 contracts, an increase of 73 percent since January 2013 and 25 percent since December 2013. Natural gas options traded electronically set a single day volume record on January 24, when 75,778 lots traded over CME Globex. The last record was 56,447, which was set on January 17, 2013.

January also saw the launch of natural gas basis markets on CME Direct. In response to strong customer demand, CME Group now offers market participants the ability to trade the natural gas Basis suite on the same exchange that settles the benchmark Henry Hub Natural Gas (NG) contact. As part of this, CME Group has added over 40 new regional contracts to compliment the basis complex, and has launched more functionality on CME Direct to match the way customers prefer to trade.

"Since the launch, we have seen active market making on the screen, with a diverse group of participants across several points in all four regions and trading activity in the prompt month, calendars and some long-dated activity," said Gary Morsches, Managing Director, Global Energy. "With the increase in volatility in the energy markets and strong trading activity across our natural gas complex, we think this new suite of products is well positioned to meet all the hedging needs of our customers."

The NYMEX suite of natural gas futures and options contracts are listed by and subject to the rules of NYMEX.