Natural Gas On MCX Settled Up 1.85%

Naturalgas on MCX settled up 1.85% at 214.50 as support seen after warmer than normal weather is now forecast to cover the entire eastern seaboard of the United States increasing cooling demand. Natural gas prices have started off the week on a strong note, following through to the upside on the heels of last Friday’s solid move to the upside. Natural gas prices are largely tied to weather forecasts, and the latest forecast from natgasweather.com is supportive of higher prices.

Specifically, conditions will be slightly cooler than normal over much of the country the next couple days as weather systems with weak cool fronts sweep south and east. It will be warm to locally hot over the West Coast as the exception. Overall, natural gas demand will remain slightly stronger than normal this week. Last Friday, the latest Commitment of Traders report from the Commodity Futures Trading Commission was released, with data as of the May 16th close.

The report indicated that large speculators increased long positioning in natural gas futures by 38,715 contracts and increased short positioning by 1,572 contracts. This leaves the total net position at 56,618 contracts on the long side, which represents a multi-year record high level of long holdings held by large speculators. The demand situation is expected to improve once warm weather sets in and gas-fired electricity generation for air conditioning need picks up.

Technically market is under fresh buying as market has witnessed gain in open interest by 4.29% to settled at 5813 while prices up 3.9 rupees, now Naturalgas is getting support at 212.6 and below same could see a test of 210.6 level, And resistance is now likely to be seen at 215.7, a move above could see prices testing 216.8.

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Suhani Verma

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