Naturalgas on MCX settled down -1.03% at 173.6 as near-record production and forecasts for lower heating demand in the next two weeks allow utilities to stockpile gas, helping inventories rebound from unusually low levels. The market had become less volatile in recent months as the weather warms up. Traders also expect growing production to meet any increase in demand, which has helped reduce volatility.
With the weather expected to warm, data provider Refinitiv projected demand in the lower 48 U.S. states would slide to an average of 77.5 billion cubic feet per day (bcfd) next week from a forecast 81.4 bcfd this week. Output in the lower 48 eased to 88.6 bcfd from a two-week high of 89.8 bcfd on Monday, according to Refinitiv Eikon data. The U.S. Energy Information Administration (EIA) said utilities added 92 billion cubic feet of gas to inventories during the week ended April 12.
That was slightly bigger than the 87-bcf build and compared with a decline of 34 bcf for the same week last year and a five-year average increase of 21 bcf for the period. The increase last week boosted stockpiles to 1.247 trillion cubic feet, 24.9 percent below the five-year average of 1.661 tcf for this time of year and the lowest for the week since 2014. Gas in storage has remained below the five-year average since September 2017.
Technically market is under long liquidation as market has witnessed drop in open interest by -0.45% to settled at 9449 while prices down -1.8 rupees, now Naturalgas is getting support at 172.6 and below same could see a test of 171.5 level, And resistance is now likely to be seen at 175.1, a move above could see prices testing 176.5.
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