Natural gas prices have been falling like nine pins in past months as the supply
glut scenario is keeping the prices nailed down. And even though swift short
covering rally is being witnessed (which started from last week of April month),
natural gas prices can fall further due to excess inventories and weak demand in
the US.
Natural gas prices have shown some lower level buying as companies started reducing natural gas production. The talk of more supply cuts by producers is also helping the prices to recover. Meanwhile weather condition will give further direction to the prices.
The sharp recovery in natural gas prices has been fueled by a combination of increased power generation demand, production cuts and cooler weather in the US, which has boosted long-dormant demand for natural gas used for heating. Inventories currently stand at 2.576 trillion cubic feet, about 50% above their average level for this time of year. Utility providers in the U.S. were switching from more expensive coal to cheaper natural gas provided further support recently. U.S. power companies used 34% more gas in February than a year earlier.
In midterm huge inventory position and weak weather driven demand can again pressurize nat gas prices to move lower.
Trading Opportunity
Sell natural gas prices at current market price with initial target of Rs 118 and an extended target of Rs 110
Natural gas prices have shown some lower level buying as companies started reducing natural gas production. The talk of more supply cuts by producers is also helping the prices to recover. Meanwhile weather condition will give further direction to the prices.
The sharp recovery in natural gas prices has been fueled by a combination of increased power generation demand, production cuts and cooler weather in the US, which has boosted long-dormant demand for natural gas used for heating. Inventories currently stand at 2.576 trillion cubic feet, about 50% above their average level for this time of year. Utility providers in the U.S. were switching from more expensive coal to cheaper natural gas provided further support recently. U.S. power companies used 34% more gas in February than a year earlier.
In midterm huge inventory position and weak weather driven demand can again pressurize nat gas prices to move lower.
Trading Opportunity
Sell natural gas prices at current market price with initial target of Rs 118 and an extended target of Rs 110
No comments:
Post a Comment