Natural Gas On MCX Settled Down

Naturalgas on MCX settled down -0.58% at 187.1 as pressure seen amid rise in inventory despite of slightly cooler weather forecasts and a cold weekend on the way stoking expectations for demand. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. rose by 7 billion cubic feet in the week ended February 24, compared to market expectations for a drop of 4 billion cubic feet. 

That compared with a withdrawal of 89 billion cubic feet in the preceding week, 48 billion a year earlier and a five-year average drop of 132 billion cubic feet. Total natural gas in storage currently stands at 2.363 trillion cubic feet, according to the U.S. Energy Information Administration, 7.3% lower than levels at this time a year ago and 12.5% above the five-year average for this time of year.

Prices of the heating fuel are down a whopping 28% so far this year as forecasts for warm winter weather weighed on heating demand expectations. Based on data from the National Oceanographic and Atmospheric Administration, this year’s extremely warm winter has pushed heating demand for natural gas to nearly 20% below average. 

Without significant demand for natural gas, inventories could stay near record levels and may even continue to pull prices even lower. Technically market is under long liquidation as market has witnessed drop in open interest by -1.59% to settled at 8298 while prices down -1.1 rupees, now Naturalgas is getting support at 185.5 and below same could see a test of 183.8 level, And resistance is now likely to be seen at 189.4, a move above could see prices testing 191.6.

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Suhani Verma

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