Natural gas dropped as mild weather kept demand for the fuel low.

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Natural gas dropped as mild weather kept demand for the fuel low.
Credit: © Reuters.

Natural Gas yesterday settled up by 0.57% at 192.9 as mild weather kept demand for the fuel low. U.S. natural gas production and demand will rise to record highs in 2023, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO). The EIA projected dry gas production will rise to 102.74 billion cubic feet per day (bcfd) in 2023 and 103.04 bcfd in 2024 from a record 98.13 bcfd in 2022. The agency also projected domestic gas consumption would rise from a record 88.53 bcfd in 2022 to 88.64 bcfd in 2023 before sliding to 86.59 bcfd in 2024. 

The latest projections for 2023 were higher than the EIA's May forecast of 101.09 bcfd for supply and 87.54 bcfd for demand. The agency forecast average U.S. liquefied natural gas (LNG) exports would reach 12.07 bcfd in 2023 and 12.73 bcfd in 2024, up from a record 10.59 bcfd in 2022. US utilities added 118 billion cubic feet of gas into storage during the week ended June 2, 2023, slightly more than market expectations of a 113 bcf increase as mild weather limited demand for the fuel for both heating and cooling. 

Technically market is under short covering as the market has witnessed a drop in open interest by -3.2% to settle at 35692 while prices are up 1.1 rupees, now Natural gas is getting support at 188.9 and below same could see a test of 184.8 levels, and resistance is now likely to be seen at 196.9, a move above could see prices testing 200.8.

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