The Natural gas price will drop by more than two and a half percent on Thursday. Ahead of Independence Day, prices fall to seven-week lows in thin e-commerce as long-term forecasts cool.
The decline comes as the National Weather Service predicts a 6- to 10-day forecast for much of the central United States will see unseasonably cooler weather, reducing demand for cooling.
Further, The Energy Information Administration on Wednesday reported inventories of the fuel stored for winter use rose by 32-billion cubic feet last week, in line with expectations. Inventories ended the week at 3.13-trillion cubic feet, 18.8% above the five-year average. The report was released a day early due to the U.S. holiday.
US natural gas futures fell to $2.35/MMBtu, the lowest in seven weeks, due to increased production and oversupply.
A heat wave is expected to persist through mid-July, but output in the Lower 48 states averaged 101.8 bcfd so far in July, up from June’s 100.2 bcfd.
Production hit a 17-month low of 99.5 bcfd in May but higher prices in recent weeks encouraged producers like EQT and Chesapeake Energy to resume drilling.
Meanwhile, LNG export plant flows are slightly lower in July when compared with June, mainly due to reduced feedgas at Cheniere Energy’s Sabine Pass.
The outlook for hot summer temperatures in the US is a positive factor for prices. The National Weather Service (NWS) said on June 11 that the vast majority of the lower 48 US states could see above-average temperatures for the next three months, and for a good portion of states, a hotter-than-normal summer is the most likely scenario.
Technical Outlook : Natural Gas price
Natural gas fell 2.85% to 197.70, down from 203.50 the previous day
Since 6 June 2024, prices halted their gains and returned from a high of 261.20. Recent low 195.70. The formation of a long bearish candlestick indicates that pressure is likely to continue. Furthermore, prices are trading below the short-term moving average.
The downside is the immediate support in the 189.20-182.00 range, below which prices can pull back to 165. On a positive note, immediate resistance is seen between 210.00-225.00
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Commodity Samachar
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