MCX Natural Gas under long liquidation; Support seen at 160.2
Commodity Online | August 07 2020
UPDATED 10:00:52 IST

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Technically Natural Gas market is under long liquidation as market has witnessed drop in open interest by 5.46% to settled at 4446 while prices down 0.2 rupees.

Now MCX Natural gas is getting support at 160.2 and below same could see a test of 157 levels, and resistance is now likely to be seen at 169.1, a move above could see prices testing 174.8.

Natural Gas yesterday settled down by 0.12% at 163.5 pared all its gains as a slightly bigger-than-expected weekly storage build weighed on prices.

Prices were up most of the day on rising liquefied natural gas (LNG) exports and forecasts the weather will remain hot through late August, keeping air conditioners humming.

The U.S. Energy Information Administration (EIA) said U.S. utilities injected 33 billion cubic feet (bcf) of gas into storage in the week ended July 31.

That is a little higher than the 30 bcf forecasted and compares with an increase of 58 bcf during the same week last year and a five-year (2015-19) average build of 33 bcf.

The increase boosted stockpiles to 3.274 trillion cubic feet (tcf), 15.1% above the five-year average of 2.845 tcf for this time of year. By the end of the injection season in October, analysts expect U.S. inventories will reach a record high over 4.1 tcf.

With hot weather expected to return, data provider Refinitiv projected U.S. demand, including exports, will rise from an average of 88.5 billion cubic feet per day (bcfd) this week to 90.6 bcfd next week.

That is a little lower than Refinitiv's outlook on Wednesday as higher gas prices cause power generators to burn more coal instead of gas.

Trading Ideas:
--Natural Gas trading range for the day is 157-174.8.
--Natural Gas pared all its gains as a slightly bigger-than-expected weekly storage build weighed on prices.
--Prices were up most of the day on rising liquefied natural gas (LNG) exports and forecasts the weather will remain hot through late August.
--EIA said U.S. utilities injected 33 billion cubic feet (bcf) of gas into storage in the week ended July 31.

Courtesy: Kedia Commodities

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