Natural Gas yesterday settled up by 6.99% at 186.7 on forecasts for colder weather than previously expected and as investors covered short positions following steep declines. The U.S. Energy Information Administration (EIA) pointed out in its "Short-Term Energy Outlook" that January temperatures in the United States were the warmest since 2006, reducing natural gas consumption. A report from the EIA showed that the production of crude oil and natural gas in the seven largest shale basins in the United States is expected to rise to a record high in March this year. In addition, although Freeport, a major U.S. liquefied natural gas (LNG) exporter, has partially resumed operations, the destocking of natural gas is still not as fast as in previous years, dragging down prices.
Goldman Sachs (NYSE: GS ), believes that the US natural gas market may enter a bear market cycle in 2023-2024. Prices have yet to form a firm bottom, and warmer weather and lower demand for heating could push gas prices further lower. Looking across the Atlantic, natural gas prices in Europe have also fallen for days, with Dutch TTF natural gas futures for March delivery down 2.4% on the day to 48.655 euros per million British thermal units, the lowest level since August 2021.
Technically market is under short covering as the market has witnessed a drop in open interest by -46.34% to settle at 8850 while prices are up 12.2 rupees, now Natural gas is getting support at 170.1 and below same could see a test of 153.4 levels. Resistance is now likely to be seen at 196.8, a move above could see prices testing 206.8.
# Natural gas trading range for the day is 153.4-206.8.
# Natural gas rose on forecasts for colder weather than previously expected and as investors covered short positions following steep declines.
# US LNG exporter Freeport resumed shipments and flows from Norway are rebounding after recent outages, which should help to refill storage
# The latest EIA data showed US stockpiles were at 2.266 bcf as of February 10, 328 bcf higher than last year.
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