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Tuesday, July 5, 2022

MCX Natural Gas under short covering; Resistance seen at 470.7

Technically Natural Gas market is under short covering as market has witnessed drop in open interest by 4.57% to settled at 5091 while prices up 0.3 rupees.

Now MCX Natural Gas is getting support at 433.2 and below same could see a test of 413.6 levels, and resistance is now likely to be seen at 470.7, a move above could see prices testing 488.6.

Natural Gas yesterday settled up by 0.07% at 452.9 erasing all losses on forecasts calling for colder weather and higher heating demand over the next two weeks than previously expected.

Even though the weather is expected to remain mild, traders noted that prices declined despite expectations for cooler weather and higher heating demand next week than previously forecast and as a rise in global gas prices keeps demand for U.S. liquefied natural gas (LNG) exports strong.

Gas prices around the world were trading near record highs that were about six times over prices in the United States, as utilities in Europe and Asia scramble for all the fuel they can get to refill stockpiles ahead of the winter heating season and meet current energy shortfalls causing power blackouts in China.

Data provider Refinitiv said output in the U.S. Lower 48 states has averaged 92.2 billion cubic feet per day (bcfd) so far in October, up from 91.1 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019.

Refinitiv projected average U.S. gas demand, including exports, would rise from 89.2 bcfd this week to 92.4 bcfd next week as more homes and businesses turn on their heaters. The forecast for next week was higher than Refinitiv projected on Monday.

Trading Ideas:
–Natural Gas trading range for the day is 413.6-488.6.
–Natural Gas settled flat erasing all losses on forecasts calling for colder weather and higher heating demand.
–Even though the weather will be cooler over the next two weeks, it was still forecast to remain milder than normal through early November.
–The U.S. price spike also occurred despite a slight decline in global gas prices and an increase in U.S. gas output.

Courtesy: Kedia Commodities

Source: Comodity Online

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