Naturalgas On MCX Settled Up 1.52%

Naturalgas on MCX settled up 1.52% at 214.2 as recent weather forecasts have consistently called for natural gas demand to be slightly stronger than normal. Seasonal patterns also call for natural gas prices to stabilize this time of year and appreciate into mid-June.

However, given the recent losses and lack of a sustained bounce in reaction to the oversold condition, it appears that natural gas prices have further to fall. Demand for the week is expected to be moderate largely due to expected cooler temperatures into the weekend in the east-central and southern states.

Temperatures remain high in the southwest and will warm again in the east and south. Stockpiles fell week over week to 13.2% below last year’s level, but they remain 10.9% above the five-year average. The EIA reported that U.S. working stocks of natural gas totaled about 2.444 trillion cubic feet, around 241 billion cubic feet above the five-year average of 2.203 trillion cubic feet and 371 billion cubic feet below last year’s total for the same period.

Working gas in storage totaled 2.815 trillion cubic feet for the same period a year ago. The U.S. Energy Information Administration (EIA) reported that U.S. natural gas stocks increased by 75 billion cubic feet for the week ending May 19. The five-year average for the week is an injection of around 90 billion cubic feet, and last year’s storage injection for the week totaled 71 billion cubic feet.

Natural gas inventories rose by 68 billion cubic feet in the week ending May 12. Technically now Naturalgas is getting support at 211.4 and below same could see a test of 208.5 level, And resistance is now likely to be seen at 216.2, a move above could see prices testing 218.1.

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Suhani Verma

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