Technically MCX Natural Gas market is getting support at 196.6 and below same could see a test of 195.5 level, And resistance is now likely to be seen at 198.6, a move above could see prices testing 199.5.
Natural Gas on MCX settled up 0.87% at 197.70 traded higher in the line of expectation fueled by short-covering ahead of weekly inventories report from the U.S. EIA. The EIA reported that working gas in storage was 1,186 Bcf as of Friday, March 8, 2019.
This represents a net decrease of 204 Bcf from the previous week. Expectations were for inventories to decline by 168 Bcf according to Estimize. Stocks were 359 Bcf less than last year at this time and 569 Bcf below the five-year average of 1,755 Bcf. At 1,186 Bcf, the total working gas is within the five-year historical range.
Production remain very strong. The EIA reveals that natural gas production grew by 10bcf per day in 2018, an 11% increase from 2017. The growth was the largest annual increase in production on record, reaching a record high for the second consecutive year. US natural gas production measured as gross withdrawals averaged 101.3 Bcf/d in 2018, the highest volume on record.
The rally actually began on Tuesday with the formation of a potentially bullish technical chart pattern amid rising expectations of a massive late session withdrawal from storage in this week’s EIA report. However, gains are likely to be limited despite the report and the return of cold weather, due to mixed cash market activity.
According to NatGasWeather for March 14 to March 20, “Temperatures will be warm for the next couple days with highs of 50s to 70F on Friday. Overall, national demand will ease to moderate-low late this week, then back to high late this weekend.”
--Natural Gas trading range for the day is 195.5-199.5.
--Natural Gas prices traded in range after the release of a report showing a slightly smaller-than-expected though still massive weekly storage draw.
--US EIA said utilities pulled 204 bcf of gas from inventories during the frigid week ended March 8, the biggest withdrawal during the month of March on record.
--Meteorologists held to their previous forecast for the next two weeks, projecting temperatures will remain mostly warmer than normal over the next two weeks.
Courtesy: Kedia Commodities