Natgas Dropped As Investors Balanced Record LNG Exports Against Rising Gas Output

  • Commodities Analysis
AJAY KEDIA

Natural Gas yesterday settled down by -4.1% at 203.4 as investors monitored forecasts for heating demand and balanced record LNG exports against rising gas output. The total amount of gas flowing to the seven biggest US LNG export plants has increased to 13.1 bcfd so far in March 2023 from 12.8 bcfd in February surpassing a monthly record of 12.9 bcfd hit in March 2022 as the Freeport plant returned to service after the fire-related shutdown in June 2022. Meanwhile, average US gas demand, including exports, is expected to rise to 120.4 bcfd next week from 119.8 bcfd this week, above Refinitiv's outlook on Friday.

On the other hand, average gas output in the US Lower 48 states grew to 98.8 bcfd this month, up from 98.2 bcfd in the previous period. On top of that, the latest EIA report showed gas stockpiles were about 22% above their five-year average during the week ended March 3. Meteorologists projected the weather in the Lower 48 states would remain mostly colder than normal through March 29 with the coldest days expected on Saturday and Sunday, March 18-19. Even though the weather will be colder than normal over the next two weeks, temperatures were still rising with the coming of spring.

Technically market is under fresh selling as the market has witnessed a gain in open interest by 4.71% to settle at 30724 while prices are down -8.7 rupees, now Natural gas is getting support at 196.6 and below same could see a test of 189.8 levels, and resistance is now likely to be seen at 212.6, a move above could see prices testing 221.8.

Trading Ideas:
# Natural gas trading range for the day is 189.8-221.8.
# Natural gas dropped as investors monitored forecasts for heating demand and balanced record LNG exports against rising gas output.
# The total amount of gas flowing to the seven biggest US LNG export plants has increased to 13.1 bcfd so far in March 2023
# Average US gas demand, including exports, is expected to rise to 120.4 bcfd next week from 119.8 bcfd this week.

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