Naturalgas On MCX Settled Up 4.66%

Naturalgas on MCX settled up 4.66% at 197.60 rallied to their highest finish of the month to date, with traders encouraged by a rise in weekly U.S. supplies of the fuel that came in below market expectations. The latest EIA natural gas storage data recorded a build of 78bcf for the week ending June 9th. The increase was below consensus estimates of around 88bcf for the week and lower than the 106 Bcf recorded last week.

This was the lowest weekly build for three weeks which provided some significant degree of relief after recent pressure. The latest weather forecasts suggested that very hot conditions would continue across parts if the South, especially in Texas which would tend to boost demand for gas. There were, however, expectations of some cooling into early next week which is liable to dampen demand.

Demand for the next week is expected to be moderate largely due to expected higher temperatures in the eastern half of the United States into the weekend. Cooler temperatures are expected across the northern and east central regions beginning early in the week. Stockpiles fell week over week to 10.6% below last year’s level, but they remain 9.2% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.709tcf, around 228bcf above the five-year average of 2.481tcf and 322bcf below last year’s total for the same period. Working gas in storage totaled 3.031tcf for the same period a year ago. Technically market is getting support at 191.8 and below same could see a test of 186 level, And resistance is now likely to be seen at 200.7, a move above could see prices testing 203.8.

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Suhani Verma

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