MCX Natural Gas under long liquidation; Support seen at 176.7
Commodity Online | January 25 2021
UPDATED 10:10:19 IST

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Technically Natural Gas market is under long liquidation as market has witnessed remain unchanged in open interest by 0% to settled at 4278 while prices remain unchanged 0 rupees.

Now MCX Natural Gas is getting support at 176.7 and below same could see a test of 173.7 levels, and resistance is now likely to be seen at 182.4, a move above could see prices testing 185.1.

Natural Gas yesterday settled flat at 179.7 on forecasts for milder weather and lower heating demand through early February. That small decline came even though higher gas prices around the world continued to prompt buyers to purchase near record amounts of U.S. liquefied natural gas (LNG).

The EIA reported that natural gas in storage was 3,009 Bcf as of Friday, January 15, 2021. This represents a net decrease of 187 Bcf from the previous week. Stocks were 36 Bcf higher than last year at this time and 198 Bcf above the five-year average of 2,811 Bcf.

Data provider Refinitiv said output in the Lower 48 U.S. states averaged 91.2 billion cubic feet per day (bcfd) so far in January. That compares with an eight-month high of 91.5 bcfd in December and an all-time monthly high of 95.4 bcfd in November 2019.

Even though the weather will remain milder than normal through early February, next week is still expected to be much colder than this week.

Refinitiv projected that cold would boost average gas demand, including exports, to 125.6 bcfd next week from 119.5 bcfd this week. The amount of gas flowing to U.S. LNG export plants averaged 10.5 bcfd so far in January, just shy of December’s 10.7-bcfd monthly record.

Trading Ideas:
--Natural Gas trading range for the day is 173.7-185.1.
--Natural Gas settled flat on forecasts for mostly mild weather and lower-than-normal heating demand through early February.
--That decline came even though much higher gas prices around the world continued to prompt buyers to purchase near record amounts of U.S. LNG
--EIA projected dry gas production will drop to 88.17 billion cubic feet per day (bcfd) in 2021 from 90.76 bcfd in 2020 before rising to 89.66 bcfd in 2022.

Courtesy: Kedia Commodities

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