MCX Natural Gas under long liquidation; Resistance seen at 225.6
Commodity Online | October 23 2020
UPDATED 10:00:20 IST

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Technically Natural Gas market is under long liquidation as market has witnessed drop in open interest by 16.97% to settled at 4986 while prices down 0.3 rupees.

Now MCX Natural Gas is getting support at 219.5 and below same could see a test of 216.5 levels, and resistance is now likely to be seen at 225.6, a move above could see prices testing 228.7.

Natural Gas yesterday settled flat on a slightly smaller than expected weekly storage build and as liquefied natural gas (LNG) exports keep rising.

Gas prices have soared in recent days as liquefied natural gas (LNG) exports jumped higher, output slowed and on forecasts for colder weather and higher heating demand over the next two weeks.

The U.S. Energy Information Administration (EIA) said U.S. utilities injected 49 billion cubic feet (bcf) of gas into storage in the week ended Oct. 16. That was slightly lower than the 52-bcf build forecast and compares with an increase of 92 bcf during the same week last year and a five-year (2015-19) average build of 75 bcf.

The increase boosted stockpiles to 3.926 trillion cubic feet (tcf), 9.1% above the five-year average of 3.599 tcf for this time of year and keeps overall inventories on track to get close to a record high over 4.0 tcf by the end of October.

Data provider Refinitiv said output in the Lower 48 U.S. states averaged 86.3 billion cubic feet per day (bcfd) so far in October. That would be the lowest in a month since September 2018 and puts output on track to drop for a fourth month in a row for the first time since June 2016.

Trading Ideas:
--Natural Gas trading range for the day is 216.5-228.7.
--Natural Gas settled flat on a slightly smaller than expected weekly storage build and as liquefied natural gas (LNG) exports keep rising.
--Gas prices have soared in recent days as LNG exports jumped higher, output slowed and on forecasts for colder weather.
--EIA said U.S. utilities injected 49 billion cubic feet (bcf) of gas into storage in the week ended Oct. 16.

Courtesy: Kedia Commodities

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