Short covering seen in MCX Zinc
MCX Copper under short covering; Resistance seen at 418.2
Crude Oil market under long liquidation; Support seen at 3574
Silver market under short covering; Support seen at 39153
MCX Nickel under short covering; Resistance seen at 812.4
Technically Natural Gas market is under short covering as market has witnessed drop in open interest by 10.41% to settled at 3141.
Now MCX Natural Gas is getting support at 213.9 and below same could see a test of 210.8 levels and resistance is now likely to be seen at 218.9, a move above could see prices testing 220.8.
Natural Gas on MCX settled up 2.75% at 217 on forecasts for much colder weather and more heating demand than previously expected for the rest of January. Meteorologists said the weather would remain seasonally cold through Jan. 18 before turning extremely frigid during the following week.
With more cold coming, Refinitiv projected demand for gas in the Lower 48 states would rise to 116.7 billion cubic feet per day (bcfd) next week and 124.5 bcfd in two weeks from just 104.3 bcfd during the warmer-than-usual weather this week.
Extreme volatility seen at the end of last year has not yet carried into the new year. Since the start of 2019, the spread between the intraday high and low has topped 5 percent of the previous session’s close just twice, including Friday, compared with 32 times in the last 35 sessions of 2018. Intense volatility late last year was due to a combination of changing weather forecasts and concerns about low stockpiles.
But weeks of warmer-than-usual weather in December and early January have allowed utilities to cut the vast storage deficit from 21 percent a few weeks ago to just 15 percent now by leaving more fuel in underground storage facilities.
Gas output in the Lower 48 has averaged near a record high of 86.7 bcfd over the past 30 days. On a daily basis, production rose to 87.2 bcfd on Thursday, its highest in two weeks, from a recent low of 85.5 bcfd on Jan. 3, according to Refinitiv data.
Trading Ideas:
–Natural gas trading range for the day is 210.8-220.8.
–Natural gas gained on forecasts for much colder weather and more heating demand than previously expected for the rest of January.
–Meteorologists said the weather would remain seasonally cold through Jan. 18 before turning extremely frigid during the following week.
–Gas output in the Lower 48 has averaged near a record high of 86.7 bcfd over the past 30 days.
Courtesy: Kedia Commodities
Source: Commodityonline.com
