Natural Gas Rose as Cold Weather was set to cut Output to its Lowest in a Month
Natural Gas yesterday settled up by 3.38% at 364.4 as cold weather was set to cut output to its lowest in a month and as near-record liquefied natural gas (LNG) exports caused utilities to pull so much gas out of storage that stockpiles were now 16% below normal for this time of year. That increase came despite forecasts for output to rise and the weather to remain mild over the next two weeks, which should allow utilities to start adding gas back into storage in about two weeks – about a week earlier than usual.
Last week’s storage withdrawal cut stockpiles to 1.519 trillion cubic feet (tcf), or 16.0% below the five-year (2017-2021) average of 1.809 tcf for this time of the year. That was the biggest percentage stockpiles were below normal levels since May 2019. Data provider Refinitiv said average gas output in the U.S. Lower 48 states was on track to rise to 93.3 bcfd in March from 92.5 bcfd in February as more oil and gas wells return to service after freezing earlier in the year. That compares with a monthly record of 96.2 bcfd in December. On a daily basis, however, gas output was on track to drop to a one-month low of 91.5 bcfd on Friday as cold weather in some producing basins reduces output.
Technically market is under fresh buying as the market has witnessed a gain in open interest by 15.9% to settled at 4506 while prices up 11.9 rupees, now Natural gas is getting support at 357.2 and below same could see a test of 350 levels, and resistance is now likely to be seen at 370, a move above could see prices testing 375.6.
# Natural gas trading range for the day is 350-375.6.
# Natural gas rose as cold weather was set to cut output to its lowest in a month
# That increase came despite forecasts for output to rise and the weather to remain mild over the next two weeks
# The U.S. EIA said utilities pulled 124 billion cubic feet (bcf) of gas from storage during the week ended March 4.