Natural Gas Futures on MCX settled up 0.93% at 184.9 as investors covered short positions after prices dropped on forecasts for warmer-than-expected weather. The U.S. Energy Information Administration (EIA) said utilities pulled 237 billion cubic feet (bcf) of gas from inventories during the brutally cold week ended Feb. 1. That was below the 245-bcf decline forecasted but was still more than double the 116 bcf withdrawal during the same week last year and a five-year average decrease of 150 bcf for the period. Refinitiv data indicates 462 heating degree days (HDDs) in the Lower 48 U.S. states over the next two weeks.
The normal is 405 HDDs for this time of year. With the weather expected to be a little warmer than previously forecast, financial data provider Refinitiv projected demand for gas in the lower 48 U.S. states would reach 118.5 billion cubic feet per day (bcfd) next week, down from its earlier forecast on Wednesday of 119.0 bcfd. That compares with an expected 104.5 bcfd during warmer weather seen this week. Last week, daily consumption peaked at a record high 147.2 bcfd on Jan. 30, the coldest day of the arctic freeze. Helping depress consumption, the amount of gas flowing to liquefied natural gas export terminals collapsed over the past month from a record high in early January. Gas production in the Lower 48 states, meanwhile, rose to 86.5 bcfd from a four-month low of 85.0 bcfd on Jan. 31.
Technically market is under short covering as market has witnessed drop in open interest by -7.09% to settle at 7373 while prices up 1.7 rupees, now Natural gas is getting support at 183.1 and below same could see a test of 181.3 level, and resistance is now likely to be seen at 186.4, a move above could see prices testing 187.9.
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