MCX Natural Gas under fresh selling; Support seen at 112.8
Commodity Online | June 26 2020
UPDATED 10:00:17 IST

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Technically Natural Gas market is under fresh selling as market has witnessed gain in open interest by 118.04% to settled at 23457 while prices down 10.9 rupees.

Now MCX Natural Gas is getting support at 112.8 and below same could see a test of 107.9 levels, and resistance is now likely to be seen at 125.3, a move above could see prices testing 132.9.

Natural Gas yesterday settled down by 8.48% at 117.7 as demand destruction from the coronavirus left the world awash in gas that utilities have been forced to squeeze into storage caverns that are expected to be full by the end of the summer season.

The U.S. Energy Information Administration said U.S. utilities injected 120 billion cubic feet of gas into storage during the week ended June 19.The increase boosted stockpiles to 3.012 trillion cubic feet, 18.3% above the five-year average of 2.546 tcf for this time of year.

By the end of the injection season in October, U.S. inventories will reach a record high near 4.1 tcf. Stockpiles are filling despite a big drop in output this year.

Refinitiv said production in the Lower 48 U.S. states has averaged 87.5 billion cubic feet per day in June, down from a 16-month low of 87.9 bcfd in May.

U.S. natural gas storage is expected to end the April-October injection season at a record 4.058 trillion cubic feet (tcf) around Oct. 31 as the coronavirus cuts demand before producers have a chance to reduce output.

That compares with 3.762 tcf at the end of the injection season in 2019, the highest since 2017, and a five-year (2015-2019) average of 3.754 tcf. In 2017, there was 3.816 tcf of gas in storage on Oct. 31. The current all-time high on Oct. 31 is 4.013 tcf in 2016.

Trading Ideas:
--Natural Gas trading range for the day is 107.9-132.9.
--Natural Gas dropped as demand destruction from the coronavirus left the world awash in gas that utilities have been forced to squeeze into storage caverns.
--The U.S. Energy Information Administration said U.S. utilities injected 120 billion cubic feet of gas into storage.
--The increase boosted stockpiles to 3.012 trillion cubic feet, 18.3% above the five-year average of 2.546 tcf for this time of year.

Courtesy: Kedia Commodities