Natural Gas on MCX settled down -2.02% at 193.8 reversing earlier gains, on uncertainty about the potential for storms to reach the Gulf of Mexico. The National Hurricane Center on Monday said two tropical depressions in the Atlantic could develop into tropical storms in the next 48 hours. If a large storm reaches the Gulf of Mexico, it could disrupt offshore natural-gas production in the region, reducing supplies and raising prices. Some offshore oil and gas operators are already evacuating platforms and rigs, the Bureau of Safety and Environmental Enforcement said Monday. The agency estimated that 5.5% of natural-gas production in the Gulf of Mexico has been shut in. However, offshore production accounts for a small percentage of total natural-gas output following a boom in shale-rock drilling in the past decade.
A large storm that avoids the Gulf of Mexico could lower natural-gas prices if power outages or other damage reduce demand for the fuel. Futures soared more than 10% last week as traders reacted to forecasts for scorching heat across most of the continental U.S. through September 5 and as traders eyed potential storm activity in the Gulf of Mexico. Meanwhile, U.S. storage levels remained in focus. Total gas in storage currently stands at 3.350 trillion cubic feet, according to the U.S. Energy Information Administration, 8.3% higher than levels at this time a year ago and 8.2% above the five-year average for this time of year.
Technically market is under long liquidation as market has witnessed drop in open interest by -16.47% to settled at 6050 while prices down -4 rupee, now Natural Gas is getting support at 192 and below same could see a test of 190.3 level, and resistance is now likely to be seen at 196.5, a move above could see prices testing 199.3.
--Natural Gas trading range for the day is 190.3-199.3.
--Natural Gas dropped reversing earlier gains, on uncertainty about the potential for storms to reach the Gulf of Mexico.
--The National Hurricane Center said two tropical depressions in the Atlantic could develop into tropical storms in the next 48 hours.
--Total gas in storage currently stands at 3.350 trillion cubic feet, according to the U.S. EIA, 8.3% higher than levels at this time a year ago.
Courtesy: Kedia Commodities