MCX Natural Gas under long liquidation; Resistance seen at 132.1
Commodity Online | May 26 2020
UPDATED 10:00:08 IST

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Technically Natural Gas market is under long liquidation as market has witnessed drop in open interest by 29.1% to settled at 3301 while prices down 1.6 rupees.

Now MCX Natural Gas is getting support at 128.5 and below same could see a test of 126.6 levels, and resistance is now likely to be seen at 132.1, a move above could see prices testing 133.8.

Natural Gas yesterday settled down by 1.21% at 130.5 as coronavirus lockdowns continue to depress demand and exports. Prices declined despite a report showing a slightly smaller-than-expected weekly storage build and a continued slowdown in output.

The U.S. Energy Information Administration (EIA) said utilities injected 81 billion cubic feet (bcf) of gas into storage during the week ended May 15. That is less than the 83-bcf build forecasted and compares with an increase of 101 bcf during the same week last year and a five-year (2015-19) average build of 87 bcf for the period.

The build boosted stockpiles to 2.503 trillion cubic feet (tcf), 19.4% above the five-year average of 2.096 tcf for this time of year. U.S. natural gas storage is expected to end the April-October injection season at a record 4.153 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 126.6-133.8.
--Natural Gas fell as coronavirus lockdowns continue to depress demand and exports.
--EIA said utilities injected 81 billion cubic feet (bcf) of gas into storage during the week ended May 15.
--The build boosted stockpiles to 2.503 trillion cubic feet (tcf), 19.4% above the five-year average of 2.096 tcf for this time of year.

Courtesy: Kedia Commodities

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