Naturalgas On MCX Settled Down -2.17%

Naturalgas on MCX settled down -2.17% at 194.30 prices dropped on fresh selling and prices tapped their lowest levels since mid-March after weekly data on US inventories of the commodity came in higher than expected. Yesterday 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. The West will remain very warm this week, apart from occasional cooling into the NW. 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. Now for short term, a rebound appears possible, given the contract’s extreme oversold condition. On a move to the upside will find resistance to be seen at 199.9, a move above could see prices testing 205.6 while prices are getting support at 190.8 and below same could see a test of 187.4 level.

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Suhani Verma

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