Natural Gas On MCX Settled Down -1.91%

Naturalgas on MCX settled down -1.91% at 211 as fresh selling seen following the large storage increase. While demand for the next week is expected to be moderate largely due to expected cooler temperatures into the weekend in the east-central and southern states. Temperatures remain high in the southwest and will warm again in the east and south.

Yesterday data from the US Energy Information Administration Thursday showed that domestic supplies of natural gas rose by 75bcf for the week ended May 19. Total stocks now stand at 2.444tcf, down 371bcf from a year ago, but 241 billion cubic feet above the five-year average, the government said. Meanwhile another spring storm will track across the east-central and southern US the next few days with heavy showers, reaching the East Thu-Fri.

Temperatures behind the cool front will drop 8-20F below normal driving late season demand for heating. High pressure will build into the southern and eastern US this weekend with temperatures warming back into the 80s and 90s, although cooling right back off next week. A weather system into the NW has brought cooling, while the SW remains very warm with 80s to 100s.

Overall, nat gas demand remains slightly stronger than normal. Technically market is under fresh selling as market has witnessed gain in open interest by 0.44% to settled at 4616 while prices down -4.1 rupees, now Naturalgas is getting support at 208.2 and below same could see a test of 205.4 level, And resistance is now likely to be seen at 215.2, a move above could see prices testing 219.4.

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Suhani Verma

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