Natural Gas Prices Dropped Continuing Its Weak Trend

Naturalgas prices dropped continuing its weak trend after weekly data on US inventories of the commodity came in higher than expected. The US Energy Information Administration reported that US natural gas stocks increased by 81 billion cubic feet for the week ending May 26. Market were expecting a storage injection of 74 billion cubic feet.

The five-year average for the week is an injection of 97 billion cubic feet, and last year’s storage injection for the week totaled 80 billion cubic feet. Natural gas inventories rose by 75 billion cubic feet in the week ending May 19.

Meanwhile a weather systems with showers and cooler than normal temperatures will track across the northern US the next several days. Over the southern and central US, temperatures will be very warm to locally hot with 80s and 90s, although with a weak system tracking through the Southwest and into Texas.

Overall, nat gas demand remains slightly stronger than normal. Demand for the next week is expected to be moderate largely due to expected cooler temperatures into the weekend across the northern United States. Temperatures are expected to be warmer than normal in the central, southern, and western portions of the country.

Mexico produced 5.334 Bcf/d of natural gas in April, state oil and natural gas company Petroleos Mexicanos (Pemex) reported, a drop of 9.9% from the 5.921 Bcf/d recorded a year ago. April’s natural gas production figure also represents a small decrease from the 5.383 Bcf/d that was accounted for during March 2017.

Technically market is under long liquidation as market has witnessed drop in open interest by -1.17% to settled at 7460, now Naturalgas is getting support at 192.2 and below same could see a test of 190.6 level, And resistance is now likely to be seen at 195.9, a move above could see prices testing 198.

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Suhani Verma

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