Natural Gas On MCX Settled Up 1.19%

Naturalgas on MCX settled up 1.19% at 186.50 but sentiments still remain weak as traders await Friday natural gas inventory report, which is scheduled to be released one day late due to the Independence Day holiday. 

Sentiments remain weak as cooler than normal weather is forecast to cover most of the east coast of the United States over the next 8-14 days according to the NOAA. According to natgasweather.com, “Temperatures of upper 80s to 100s will cover much of the country this week for strong national demand as high pressure dominates.

The exception will be over the Ohio Valley and Northeast where weather systems will arrive late this week through the weekend with showers and slightly cooler than normal temperatures. Overall, natural gas demand will be high besides the northeastern US” The forecast at the start of the week called for warmer temperatures for Friday to Monday. This has been taken out, likely fueling Wednesday’s steep break.

This change also changed demand from “increasing to high” to “high besides the northeastern U.S.” The problem with this is that the northeast US is a highly populated area. So lower temperatures equals lower demand. Friday’s EIA report is expected to show a build of about 63bcf for the week-ended June 30. 

This compares with a gain of 46bcf in the preceding week, an increase of 39 billion a year earlier and a five-year average rise of 66 billion cubic feet.Technically market is getting support at 185 and below same could see a test of 183.4 level, And resistance is now likely to be seen at 188, a move above could see prices testing 189.4.

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Suhani Verma

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