Natural Gas prices are also above the 50-day SMA (Orange Line) and RSI is above 50 mark, which indicates prices could edge higher in near term
Natural Gas prices made a higher high for the week and traded higher than last week closing of Rs 203.2. In general, the market looks as if it is getting a bit heavy, but there is no hurry to go in either direction right now.
The US Energy Information Administration (EIA) reported Thursday morning that the US natural gas stockpiles increased by 33 billion cubic feet for the week ending August 10.
In its August revision to the Short-Term Energy Outlook, the EIA estimated that dry gas production rose by 8.4 billion cubic feet per day to 81.8 billion cubic feet in July despite record-high demand and relatively low inventory levels. Daily production is forecast to rise to 84.3 billion cubic feet by the end of next year.
Total US stockpiles rose week over week to 22.3 percent below last year’s level and are now 20 percent below the five-year average.
The EIA reported that the US working stocks of natural gas totalled about 2.387 trillion cubic feet at the end of last week, around 595 billion below the five-year average of 2.982 trillion cubic feet and 687 billion below last year’s total for the same period.
Working gas in storage totalled 3.074 trillion cubic feet for the same period a year ago. Bearish risks are record high production, falling Cooling degree-days (CDD)/ Total degree-days (TDD) and mild winter outlook. Rising nuclear outages and global LNG fundamentals are the two bullish factors as of now.
MCX Natural Gas Technical Analysis:
Above is the daily chart of Natural gas and we can see that prices have bottomed around Rs 109 in February 2016 and from there we saw a rally towards Rs 260, in that process prices, broke above the horizontal line which offered resistance at previous two occasions marked by down arrows on the char.
After prices peaking, around Rs 260 we have seen prices taking supports at the same horizontal line, which now is acting as support marked by ‘Up’ arrows on the chart.
Recently, prices have taken supports at the horizontal trend line for the third time and have turned higher. Prices have formed a triangle as seen from the trend line (T1 and T2).
Prices are have taken support at upward sloping trend line (T1) at Rs 187, the downward sloping trend line resistance is at 213 and a sustained move above that could take prices higher towards 230 the next swing high and followed by Rs 250 the previous swing high.
As of now, prices are consolidating between a broad range of Rs 213 and Rs 185 for the directional move to happen prices needs to break this range and then we could see a directional move our expectation is of the upward breakout.
Prices are also above the 50-day SMA (Orange Line) and RSI is above 50 mark, which indicates prices could edge higher in near term.
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