MCX Natural Gas under short covering; Support seen at 150.4
Commodity Online | January 17 2020
UPDATED 09:30:52 IST

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Technically Natural Gas market is under short covering as market has witnessed drop in open interest by 9.5% to settled at 27441 while prices up 1 rupees.

Now MCX Natural Gas is getting support at 150.4 and below same could see a test of 148.4 levels, and resistance is now likely to be seen at 154.3, a move above could see prices testing 156.2.

Natural Gas on MCX settled up 0.66% at 152.3 on short covering amid smaller than usual weekly storage draw and midday forecasts for less weather. Meteorologists projected weather in the U.S. Lower 48 states would turn colder than normal, but a little warmer than forecast earlier, from Jan. 19-22 and Jan. 28-31.

The U.S. Energy Information Administration (EIA) said utilities pulled 109 billion cubic feet (bcf) of gas from storage during the week ended Jan. 10. Data provider Refinitiv projected average demand in the Lower 48 states, including exports, would jump to 133.1 bcfd next week from 113.7 bcfd this week.

U.S. natural gas production and demand will decline in 2021 after hitting record highs this year, the Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO). EIA projected dry gas production will fall to 94.11 billion cubic feet per day (bcfd) in 2021 from a record 94.74 bcfd in 2020. The current all-time high is 92.03 bcfd in 2019.

Trading Ideas:
--Natural Gas trading range for the day is 148.4-156.2.
--Natural Gas gained on short covering amid smaller than usual weekly storage draw and midday forecasts for less weather.
--The U.S. Energy Information Administration (EIA) said utilities pulled 109 billion cubic feet (bcf) of gas from storage during the week ended Jan. 10.
--U.S. natural gas production and demand will decline in 2021 after hitting record highs this year, EIA said.

Courtesy: Kedia Commodities

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