MCX Natural Gas under short covering; Support seen at 153.7

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MCX under long liquidation; Support seen at 37688

Technically Natural Gas market is under short covering as market has witnessed drop in by 11.95% to settled at 12395 while prices up 3.7 rupees.

Now MCX Natural Gas is getting support at 153.7 and below same could see a test of 151.2 level, and resistance is now likely to be seen at 158.7, a move above could see prices testing 161.2.

Natural Gas on MCX settled up 2.42% at 156.3 ON a much smaller-than-expected weekly storage build and forecasts for hotter weather and higher cooling demand next week. However, upside seen limited on forecasts for less hot weather and lower cooling demand over the next two weeks than previously expected.

Prices mostly traded near multiyear lows since May because record production and mild spring weather allowed utilities to inject huge amounts of gas into storage, shrinking a massive inventory deficit and removing concerns about shortages this winter even though power demand and liquefied natural gas (LNG) exports are on track to hit all-time highs.

The amount of gas in inventory has remained below the five-year average since September 2017. It fell as low as 33% below that average in March 2019. But with production expected to keep growing, should reach a near-normal 3.7 trillion cubic feet (tcf) by the end of the summer injection season on Oct. 31.

Demand will slide to 87.7 bcfd during the week before the U.S. Labor Day holiday as the summer comes to an end even though pipeline and LNG exports are expected to rise. Gas production in the Lower 48 states, meanwhile, edged up to 91.7 bcfd on Thursday from a one-week low of 91.1 bcfd on Tuesday, according to Refinitiv.That compares with an all-time high of 91.9 bcfd on Aug. 12.

Trading Ideas:
–Natural Gas trading range for the day is 151.2-161.2.
–Natural Gas gained on a much smaller-than-expected weekly storage build and forecasts for hotter weather and higher cooling demand next week.
–However, upside seen limited on forecasts for less hot weather and lower cooling demand over the next two weeks than previously expected.
–Demand will slide to 87.7 bcfd during the week before the U.S. Labor Day holiday as the summer comes to an end.

Courtesy: Kedia Commodities

Source: Commodityonline.com