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New York
Tuesday, May 17, 2022

MCX Natural Gas under short covering; Resistance seen at 418.8

Technically Natural Gas market is under short covering as market has witnessed drop in open interest by 24.42% to settled at 4392 while prices up 20.5 rupees.

Now MCX Natural Gas is getting support at 396.1 and below same could see a test of 382.2 levels, and resistance is now likely to be seen at 418.8, a move above could see prices testing 427.6.

Natural Gas yesterday settled up by 5.26% at 410.1 as short sellers took some profits and as higher global prices keep demand for U.S. liquefied natural gas (LNG) exports strong.

That price increase came despite rising output and forecasts for milder weather and lower heating demand next week than previously expected.

Price gains in the United States, however, were restrained compared with overseas markets because the United States has more than enough gas in storage for winter and ample production to meet domestic and export demand.

Prices in Europe and Asia were about five times higher than in the United States. Data provider Refinitiv said output in the U.S. Lower 48 states averaged 94.9 billion cubic feet per day (bcfd) so far in November, up from 94.1 bcfd in October.

That compares with a monthly record of 95.4 bcfd in November 2019. Refinitiv projected average U.S. gas demand, including exports, would hold around 96.4 bcfd this week and next.

The forecast for next week was much lower than what Refinitiv projected on Monday. The amount of gas flowing to U.S. LNG export plants has averaged 11.0 bcfd so far in November, up from 10.5 bcfd in October. That compares with a monthly record of 11.5 bcfd in April.

Trading Ideas:
–Natural Gas trading range for the day is 382.2-427.6.
–Natural Gas edged up as short sellers took some profits and as higher global prices keep demand for U.S. LNG exports strong.
–That price increase came despite rising output and forecasts for milder weather and lower heating demand next week than previously expected.
–U.S. stockpiles were currently about 3% below the five-year average for this time of year.

Courtesy: Kedia Commodities

Source: Comodity Online

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