Natural Gas On MCX Settled Down

Naturalgas on MCX settled down -1.67% at 188.80 dropped in the line of expectation as forecasts for below-normal temperatures across most parts of the U.S. over the next two weeks weighed. Updated weather forecasting models showed that cooling will fan out across the northern and east central U.S. this weekend into early next week. Looking further out, the east-central U.S., including the Northeast will be near to slightly cooler than normal from June 20-27, as weather systems track through.

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. Meanwhile the latest data from North Dakota recorded and increase in gas output to 1.84 Bcf/d for the month from 1.73 Bcf/d the previous month and this was an all-time high for production. The data will maintain expectations that increased output for shale oil will also lead to an increase in gas production.

There will be further concerns that higher output will put underlying downward pressure on prices. Market participants looked ahead to weekly storage data due on Thursday, which is expected to show a build in a range between 79 and 89 billion cubic feet in the week ended June 9. That compares with a gain of 106 billion cubic feet in the preceding week, an increase of 69 billion a year earlier and a five-year average rise of 87 billion cubic feet.

Technically market is under fresh selling as market has witnessed gain in open interest by 6.83% to settled at 6915 while prices down -3.2 rupees, now Naturalgas is getting support at 187 and below same could see a test of 185.2 level, And resistance is now likely to be seen at 191.3, a move above could see prices testing 193.8.

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Suhani Verma

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