Naturalgas On MCX Settled Down -3.5%

Naturalgas on MCX settled down -3.5% at 206.70 in the line of expectation as cooler than normal weather spread across most of the east coast of the United States, reducing cooling demand, which reduces natural gas demand. Prices where under pressure with trading volumes likely to remain light as U.S. markets remained closed for Memorial Day.

The latest U.S. weather model called for mild temperatures over the next two weeks, which should dampen natural gas demand during that time. Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on spring heating demand. Market participants looked ahead to weekly storage data due on Thursday, which is expected to show a build in a range between 70 and 80 billion cubic feet in the week ended May 26.

Total natural gas in storage currently stands at 2.444 trillion cubic feet, according to the US Energy Information Administration, 13.2% lower than levels at this time a year ago but 9.9% above the five-year average for this time of year.

That compares with a gain of 75 billion cubic feet in the preceding week, an increase of 82 billion a year earlier and a five-year average rise of 97 billion cubic feet. Technically market is under long liquidation as market has witnessed drop in open interest by -17.32% to settled at 5550 while prices down -7.5 rupees, now Naturalgas is getting support at 203.7 and below same could see a test of 200.7 level, And resistance is now likely to be seen at 212.1, a move above could see prices testing 217.5.

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Suhani Verma

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