Natural Gas fell Weighed Down by Forecasts For Milder Weather

  • Commodities Analysis

Natural Gas yesterday settled down by -0.43% at 281 weighed down by forecasts for milder weather and lower heating demand than previously expected and smaller-than-usual storage withdrawal last week. The U.S. Energy Information Administration (EIA) said utilities pulled 55 billion cubic feet (bcf) of gas from storage during the week ended Dec. 17.
 
Refinitiv estimated 400 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, down from the 409 HDDs estimated on Wednesday. The normal is 429 HDDs for this time of year. HDDs, used to estimate demand to heat homes and businesses, measure the number of degrees a day's average temperature is below 65 Fahrenheit (18 Celsius). Refinitiv projected average U.S. gas demand, including exports, would fall from 125.3 billion cubic feet per day this week to 115.3 bcfd next week.
 
Two German natural gas importers assured Gazprom (MCX: GAZP ) was meeting its contractual obligations, while contracted supply limits for this year had already been reached. Earlier this week, prices had rallied to all-time highs bolstered by a combination of freezing temperatures and lower power output from alternative sources, which added to previous concerns about delays in the Nord Stream 2 pipeline approval and rising tensions in eastern Europe.
 
Technically market is under long liquidation as the market has witnessed a drop in open interest by -11.46% to settled at 2997 while prices down -1.2 rupees, now Natural gas is getting support at 276.1 and below same could see a test of 271.3 levels, and resistance is now likely to be seen at 285.9, a move above could see prices testing 290.9.
 
Trading Ideas:
# Natural gas trading range for the day is 271.3-290.9.
# Natural gas fell weighed down by forecasts for milder weather and lower heating demand than previously expected and smaller-than-usual storage withdrawal.
# EIA said utilities pulled 55 billion cubic feet (bcf) of gas from storage during the week ended Dec. 17.
# Gazprom’s customers in Europe had requested less gas and more US LNG tankers were crossing the Atlantic towards the continent.

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