Natural Gas yesterday settled up by 5.67% at 223.8 as forecasts for colder weather and higher heating demand over the next two weeks prompted investors to open new positions after a massive selloff, which brought prices to levels last seen in September 2022. On top of that, the latest EIA report showed US utilities pulled 71 bcf of gas from storage last week, slightly more than market expectations of a 67 bcf. Meanwhile, investors assessed whether the Freeport LNG export plant in Texas would operate at full power until mid-March or later, allowing utilities to leave more gas in storage.
Refinitiv said average gas output in the U.S. lower 48 states fell from 98.1 bcfd in January to 97.4 bcfd so far in February, due to a cold spell earlier in February which froze oil and gas wells. That compared with a monthly record of 99.8 bcfd in November 2022. On Wednesday, Chesapeake Energy Corp (NYSE:CHK) said it would drop three drilling rigs in the coming months and would reduce gas output by 4% to 6% this year. The move followed Comstock Resources Inc, which earlier disclosed it would take down two rigs in coming months due to weaker prices.
Technically market is under short covering as the market has witnessed a drop in open interest by -8.93% to settle at 27026 while prices are up 12 rupees, now Natural gas is getting support at 216.4 and below same could see a test of 208.9 levels, and resistance is now likely to be seen at 228.6, a move above could see prices testing 233.3.
Trading Ideas:
# Natural gas trading range for the day is 208.9-233.3.
# Natural gas climbed amid forecasts for colder weather and higher heating demand over the next two weeks
# The latest EIA report showed US utilities pulled 71 bcf of gas from storage last week, slightly more than market expectations of a 67 bcf.
# Investors assessed whether the Freeport LNG export plant in Texas would operate at full power until mid-March or later.