Natural Gas Gained On Forecasts For Higher Demand This Week
Natural Gas yesterday settled up by 2.46% at 299.6 on forecasts for higher demand this week than previously expected, colder-than-normal weather coming in late January, and uncertainty about when the Freeport liquefied (LNG) export plant in Texas will exit a seven-month outage. Investors poured money back into the commodity amid prospects of a recovery in demand as temperatures should move towards more seasonal levels later this month. Still, any significant rebound is likely unsustainable if unseasonably warm weather sticks and domestic output continues to soar. US natural gas production is expected to grow more than 2% this year to a record daily average of 100.3 billion cubic feet, the Energy Information Administration said.
Adding to the bearish tone, the Freeport LNG export plant in Texas, forced to go offline in June following a fire, again delayed the restart to the second half of January, leaving more supply on the domestic market. Traders worry the plant will only be back online during the first or second quarter due to the need for further work to satisfy federal regulators. The number of rigs drilling for natural gas in the United States fell by 2 this week to 150, data from oil services firm Baker Hughes showed.
Technically market is under short covering as the market has witnessed a drop in open interest by -12.31% to settle at 22478 while prices are up 7.2 rupees, now Natural gas is getting support at 292.8 and below same could see a test of 286.1 levels, and resistance is now likely to be seen at 304.7, a move above could see prices testing 309.9.
Trading Ideas:
# Natural gas trading range for the day is 286.1-309.9.
# Natural gas gained on forecasts for higher demand this week than previously expected, with colder-than-normal weather coming in late January.
# US natural gas production is expected to grow more than 2% this year to a record daily average of 100.3 billion cubic feet
# US natgas rig count fell 2 at 150 – Baker Hughes.