Natural gas dropped as U.S. output and forecasts for mostly mild weather

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  • Commodities News
Natural gas dropped as U.S. output and forecasts for mostly mild weather
Credit: © Reuters.

Natural gas prices experienced a significant decline of -5.7%, settling at 215, driven by factors such as near-record U.S. output and forecasts for predominantly mild weather through late December. This weather outlook has allowed utilities to maintain higher gas levels in storage to meet potential heating demand. 

The average gas output in the Lower 48 U.S. states dropped to 107.5 billion cubic feet per day (bcfd) in early December, a slight decrease from the record 107.8 bcfd observed in November. Daily output is projected to decline by 2.1 bcfd over the past three days, reaching a preliminary four-week low of 106.2 bcfd. Meteorologists anticipate a shift in weather conditions from warmer-than-normal (Dec. 6-12) to near-normal (Dec. 13-16) before returning to warmer-than-normal conditions (Dec. 17-21). As colder weather approaches seasonally, U.S. gas demand in the Lower 48, including exports, is expected to rise from 121.8 bcfd this week to 126.2 bcfd next week, according to LSEG forecasts. Despite the downward pressure on prices, record amounts of gas continue to flow to U.S. liquefied natural gas (LNG) export plants, with gas flows reaching an average of 14.4 bcfd in December, up from the record 14.3 bcfd seen in November. 

Technically, the natural gas market is undergoing fresh selling, with a 14.38% increase in open interest to settle at 43630. Prices are down by -13 rupees. Natural gas finds support at 209.4, and a potential test of 203.8 could occur below that level. On the upside, resistance is likely around 225.6, and a move above could lead to a test of 236.2.

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  • Waseemsadath Kwsadath @Waseemsadath Kwsadath
    market current price update please mcx. log gap down price advisory no long up price advisory
    Like 0

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