Naturalgas On MCX Settled Up 1.76%

Naturalgas on MCX settled up 1.76% at 196.60 gained on short covering rising for the first time in seven sessions as investors returned to the market to seek cheap valuations in wake of recent losses. Support seen despite the latest US weather model called for mild temperatures over the next two weeks, which should reduce heating demand during that time. 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.

A weather systems with showers and cooler than normal temperatures will track across the Great Lakes and Northeast the next few days. A second warm and moist system over the South and Southeast will bring heavy showers and thunderstorms, but still with highs in the 80s. The West will be warm to hot, then cooling Fri-Mon as Pacific systems arrive. After the NE cool shot exits late in the week, warm to hot conditions will gain ground east of the Rockies this weekend with widespread 80s and 90s.

Overall, nat gas demand will be near to slightly stronger than normal. Now market participants looked ahead to weekly storage data due on Thursday, which is expected to show a build in a range between 88 and 98 billion cubic feet in the week ended June 2. That compares with a gain of 81 billion cubic feet in the preceding week, an increase of 65 billion a year earlier and a five-year average rise of 94bcf.

Technically market is under short covering as market has witnessed drop in open interest by -8.13% to settled at 5895 while prices up 3.4 rupees, now Naturalgas is getting support at 192.9 and below same could see a test of 189.3 level, And resistance is now likely to be seen at 198.8, a move above could see prices testing 201.1.

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Suhani Verma

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