Natural Gas yesterday settled up by 1.35% at 224.5 on a drop in daily output and forecasts for the weather to remain hotter than normal through early August, especially in Texas. That price increase occurred despite forecasts for less demand over the next two weeks than previously expected. The number of rigs drilling for natural gas in the United States fell by 2 this week to 131, data from oil services firm Baker Hughes showed.
Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 101.5 billion cubic feet per day (bcfd) so far in July, from 101.0 bcfd in June. That compares with a monthly record of 101.8 bcfd in May. Daily, however, output was on track to drop by 3.0 bcfd to a preliminary four-month low of 98.9 bcfd on Tuesday due mostly to declines in Texas, Pennsylvania and Colorado. Meteorologists forecast the weather in the Lower 48 states will remain hotter than normal through at least Aug. 9. With hotter weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 105.8 bcfd this week to 107.0 bcfd next week. Those forecasts were lower than Refinitiv’s outlook on Monday.
Technically market is under short covering as the market has witnessed a drop in open interest by -6.03% to settle at 25047 while prices are up 3 rupees, now Natural gas is getting support at 220.6 and below the same could see a test of 216.6 levels, and resistance is now likely to be seen at 228, a move above could see prices testing 231.4.