Natural gas Rose On Forecasts Of Colder Weather And Higher Heating Demand

  • Commodities Analysis

Natural Gas Futures yesterday settled up by 6.22% at 503.7 on forecasts of colder weather and higher heating demand over the next two weeks than previously expected. That colder weather should force utilities to pull more gas from storage. Gas stockpiles were about 2.4% below the five-year (2017-2021) average for this time of year. Gas futures rose despite Freeport LNG's announcement last week that it expects to delay the restart of its liquefied natural gas export plant in Texas from mid-December to the end of the year.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.6 bcfd so far in December, up from a monthly record of 99.5 bcfd in November. With colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 118.0 bcfd this week to 121.3 bcfd next week. Those forecasts were higher than Refinitiv's outlook on Tuesday. The average amount of gas flowing to U.S. LNG export plants held around 11.8 bcfd so far in December, the same as in November. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG.

Technically market is under short covering as the market has witnessed a drop in open interest by -32.43% to settle at 9433 while prices are up 29.5 rupees, now Natural gas is getting support at 485 and below same could see a test of 466.4 levels. Resistance is now likely to be seen at 515.5, a move above could see prices testing 527.4.

Trading Ideas:
# Natural gas trading range for the day is 466.4-527.4.
# Natural gas rose on forecasts of colder weather and higher heating demand over the next two weeks than previously expected.
# That colder weather should force utilities to pull more gas from storage.
# Gas stockpiles were about 2.4% below the five-year (2017-2021) average for this time of year.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100

Related Articles