Technically Natural Gas market is under long liquidation as market has witnessed drop in open interest by 24.18% to settled at 3687 while prices down 5 rupees.
Now MCX Natural Gas is getting support at 232.5 and below same could see a test of 227.2 level, And resistance is now likely to be seen at 243.9, a move above could see prices testing 250.
Natural Gas on MCX settled down 2.06% at 237.90 prices whipsawed tumbling lower as came under pressure and then rebounding into the close. Inventories increased in line with expectations, but the colder than normal weather than is expected to cover most of the US for the next 2-weeks should increase heating demand driving up the price of natural gas.
The eminence of Hurricane Michael made its way into the mid-Atlantic and is expected to pick up steam as it re-enters the Atlantic Ocean. There were few production installations that were damaged by the storm.
Tropical Storm Nadine is heading west, but it does not look like that storm will make it to the US. Earlier this month prices on MCX gained tracking firmness from Nymex natural gas prices which have jumped nearly 15 percent over the past month, rising to roughly $3.30 per million Btu (MMBtu).
The market has clearly grown a little concerned about adequate supplies heading into the winter and that is reflected in natural gas prices rising to their highest point since the beginning of the year.
For the week ending on September 28, natural gas inventories stood at 2,866 billion cubic feet (Bcf), or 636 Bcf lower than at the same point a year earlier, as well as 607 Bcf below the five-year average. Inventories dropped to extraordinarily low levels last winter as much of North America became enveloped in exceptionally cold weather.
--Natural Gas trading range for the day is 227.2-250.
--Natural Gas prices whipsawed tumbling lower as riskier asset came under pressure and then rebounding into the close.
--Inventories increased in line with expectations, but the colder than normal weather than is expected to cover most of the US for the next 2-weeks should increase demand.
--The Energy Information Administration reported that working gas in storage was 2,956 Bcf as of Friday, October 5, 2018.
Courtesy: Kedia Commodities