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New York
Tuesday, December 7, 2021

MCX Natural Gas under short covering; Resistance seen at 396.6

Technically Natural Gas market is under short covering as market has witnessed drop in open interest by 30.32% to settled at 3571 while prices up 8.3 rupees.

Now MCX Natural Gas is getting support at 373.8 and below same could see a test of 359.4 levels, and resistance is now likely to be seen at 396.6, a move above could see prices testing 405.

Natural Gas yesterday settled up by 2.19% at 388.1 on forecasts calling for cooler weather and higher heating demand over the next two weeks than previously expected.

Traders noted that prices fell to a near four-week low earlier in the day on early forecasts calling for the weather to remain warmer than usual over the next two weeks.

Even with the cooler midday forecast, however, the U.S. weather is still expected to remain a milder than normal through early November. Global gas prices were up 17% on Monday as utilities in Europe and Asia scrambled to fill inventories before the winter heating season.

But no matter how high global prices rise, the United States was already close to producing LNG at full capacity.In addition, U.S. gas stockpiles, unlike those in Europe, were in good shape for the winter, with more than enough fuel available for the heating season.

Speculators cut their net long positions on the New York Mercantile and Intercontinental Exchanges for a second week in a row last week to their lowest since April 2021, according to data from the Commodity Futures Trading Commission (CFTC).

Data provider Refinitiv said gas output in the U.S. lower 48 states has risen to an average of 92.0 billion cubic feet per day (bcfd) so far in October from 91.1 bcfd in September. 

Trading Ideas:
–Natural Gas trading range for the day is 359.4-405.
–Natural Gas edged up on forecasts calling for cooler weather and higher heating demand over the next two weeks than previously expected.
–Prices fell to a near four-week low earlier in the day on early forecasts calling for the weather to remain warmer than usual.
–Speculators cut their net long positions for a second week in a row last week to their lowest since April 2021.

Courtesy: Kedia Commodities

Source: Comodity Online

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