17.9 C
New York
Monday, May 23, 2022

Natural Gas market under short covering; Support seen at 204.7

Crude Oil market under short covering; Support seen at 4565

MCX Zinc under short covering; Support seen at 162.1

MCX Nickel under fresh buying; Resistance seen at 957.3

MCX Aluminium likely to move in a range of 139.8-144

MCX Mentha Oil under long liquidation; Resistance seen at 1666.2

Technically Natural Gas market is under short covering as market has witnessed drop in open interest by 3.93% to settle at 5664.

Now MCX Natural Gas is getting support at 204.7 and below same could see a test of 202.7 levels and resistance is now likely to be seen at 208.4, a move above could see prices testing 210.1.

Natural Gas on MCX settled up 1.18% at 206.6 supported by concerns of lower inventories, a day after government data showed lower-than-normal injection of the fuel into storage.

Despite higher-than-expected weekly storage injection, inventories are still at a significant deficit compared to last year and the five-year average levels and this deficit will likely remain for the balance of the summer.

As a result, the winter demand season is expected to begin with less than 3.4 trillion cubic feet of working gas storage. The U.S. Energy Information Administration reported that utilities added 33 billion cubic feet (bcf) of gas into storage in the week of Aug. 10.

Early estimates showed utilities were likely to inject 41 bcf gas into storage in the week of Aug. 17. This compares with increases of 45 bcf in the same week last year and a five-year average build of 52 bcf for the period. If correct, this would be the seventh straight week that injections would be smaller than normal.

The increase would also boost stockpiles to 2.428 tcf, leaving inventories about 20 percent below the five-year average of 3.034 tcf for this time of year, and the lowest for the week since 2003. Latest short-term weather forecasts show the cooling trend that has engulfed the middle of the United States moving out over the eight-to-14-day period.

Production in the Lower 48 U.S. states averaged a record-high 81.7 billion cubic feet per day (bcfd) over the past 30 days.

Trading Ideas:
–Natural gas trading range for the day is 202.7-210.1.
–Natural gas prices gained supported by concerns of lower inventories, a day after government data showed lower-than-normal injection of the fuel into storage.
–Despite higher-than-expected weekly storage injection, inventories are still at a significant deficit compared to last year and the five-year average levels.
–As a result, the winter demand season is expected to begin with less than 3.4 trillion cubic feet of working gas storage.

Courtesy: Kedia Commodities

Source: Commodityonline.com

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