Naturalgas On MCX Settled Up 2.27%

Naturalgas on MCX settled up 2.27% at 189.40 as prices rebounded on Monday, closing near session highs, generating an inside day which is a lower high and a higher low which reflects indecision. Warmer than normal weather is expected to cover most of the United States over the next 8-14 days, which should help buoy natural gas demand. Hot high pressure with highs of 90s and 100s will expand to cover most of the country this week for strong demand besides portions of the Great Lakes and northeastern US.

Next weekend, a weak weather system will bring showers and minor cooling across the Great Lakes and East while remaining hot over the rest of the country. Overall, nat gas demand will be high to very high besides the northeastern US. Also support also seen as the latest data recorded a further small increase in long, non-commercial natural gas contracts on NYMEX to above 92,500 in the latest week from just below 81,000 previously.

This was the highest level for three weeks, although still substantially below the levels seen during the second quarter. Market participants looked ahead to weekly storage data due on Thursday, which is expected to show a build in a range between 51 and 61bcf in the week ended July 7. That compares with a gain of 72bcf in the preceding week, an increase of 64 billion a year earlier and a five-year average rise of 72 billion cubic feet.

Technically market is under short covering and getting support at 186.6 and below same could see a test of 183.8 level, And resistance is now likely to be seen at 191.3, a move above could see prices testing 193.2.

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Suhani Verma

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