Technically Natural gas market is getting support at 194 and below same could see a test of 190.9 levels and resistance is now likely to be seen at 198.9, a move above could see prices testing 200.7.
Natural gas on MCX settled up 2.18% at 197.10 on fresh buying extended this week's rally into a third day hitting their strongest level in around two weeks as investors looked ahead to weekly data from the US on supplies in storage to weigh what the impact of recent storm activity was on supply and demand.
Natural gas prices have gained around 6% so far this week after Hurricane Irma struck the US southeast with less force than once feared, easing worries over a hit to energy demand. Irma remains stalled over the east-central with heavy showers and thunderstorms, but will finally eject across the northeastern US Thu-Fri.
Temperatures remain cooler than normal under Irma’s influence and in the upper 60s to lower 80s, leading to lighter than normal national demand. The Southwest, Plains, and Texas will remain hot in the 90s and 100s due to strong high pressure dominating.
Overall, national nat gas demand will be MODERATE-LOW increasing to MODERATE-HIGH. Despite recent gains, prices look set to remain on the back foot in the weeks ahead as traders react to the reality that higher summer demand for the commodity is coming to an end.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning. But with autumn due to start on September 22, power burns to feed air conditioning demand have probably peaked for now.
--Natural gas trading range for the day is 190.9-200.7.
--Natural gas extended this week's rally as investors looked ahead to weekly data to see the impact of recent storm activity.
--Hurricane Irma struck the U.S. southeast with less force than once feared, easing worries over a hit to energy demand.
--Market participants looked ahead to weekly storage data due on Thursday, which is expected to show a build in a range between 72 and 83bcf.
Courtesy: Kedia Commodities