Naturalgas On MCX Settled Up 0.92%

Naturalgas on MCX settled up 0.92% at 198.30 as support seen on fresh buying after robust global factors helped support natural gas prices on Tuesday and expectations of more favourable weather conditions could provide a boost from late this week if support levels hold in the interim period.

The global backdrop for natural gas prices was significantly more favourable during Tuesday. Cooler than normal conditions continue across the northern US as weak weather systems result in comfortable highs of 60s and 70s.

Temperatures will warm back into the upper 80s to 90s late in the week over the southern and eastern US as high pressure returns, although remaining slightly cool over the north-central US. It’s not quite as hot over the SW, but still with temperatures over much of the West into the south-central US in the upper 80s to 100s.

Overall, nat gas demand will be moderate increasing to high next week. Last Thursday’s US EIA’s weekly report for the week-ended June 16 showed that total natural gas in storage currently stands at 2.770tcf. This is 10.4% lower than levels at this time a year ago but 7.4% above the five-year average for this time of year.

This week’s report for the week-ended June 23 is expected to show a build of about 56bcf. This compares with a gain of 61bcf in the preceding week, an increase of 37 billion a year earlier and a five-year average rise of 72bcf. 

The current rally is as good as the weather forecast so continue to look for strength as long as the move remains underpinned by the return of warm to hot temperaturesTechnically market is getting support at 196.8 and below same could see a test of 195.3 level, And resistance is now likely to be seen at 199.6, a move above could see prices testing 200.9.

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Suhani Verma

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