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Technically Natural Gas market is under fresh buying as market has witnessed gain in open interest by 12.22% to settled at 5509 while prices up 3.2 rupees.
Now Natural Gas is getting support at 199.5 and below same could see a test of 196.8 levels and resistance is now likely to be seen at 203.9, a move above could see prices testing 205.6.
Natural Gas on MCX settled up 1.61% at 202.10 as support seen on fresh buying after the news that the growing storage deficit boosted supply concerns as support was underpinned by lingering above-average summer temperatures.
Nymex the front-month contract traded between $2.884/MMBtu and $2.951/MMBtu on Wednesday. While the most recent six- to 10-day temperature forecast from the US National Weather Service calls for warmer-than-average temperatures for most of the Upper Midwest and Northeast, which will likely add to the recent strength in the market.
The strong dry gas production has mitigated supply concerns somewhat and has transformed the market for the winter months. Producers have demonstrated their ability to keep up with demand, and a storage deficit of this size in the past would have caused gas prices to reach $5/MMBtu or more, as opposed to the current levels of under $3/MMBtu.
According to the National Weather Service, over the next six- to 10-days, the U.S. should see warmer-than-average temperatures for most of the Upper Midwest and Northeast, which is expected to add to the strength the market has experienced lately.
Trading Ideas:
–Natural Gas trading range for the day is 196.8-205.6.
–Natural Gas rose as worries about low inventories offset forecasts for cooler weather next week than previously expected.
–The amount of gas in storage was at its lowest in 15 years for the time of year, after four consecutive weeks of lower-than-normal storage builds.
–Production in the Lower 48 U.S. states averaged a record high 81.0 billion cubic feet per day (bcfd) over the past 30 days.
Courtesy: Kedia Commodities
Source: Commodityonline.com
