Natural Gas yesterday settled down by -0.39% at 228.4 as the hotter weather projections for upcoming weeks failed to accelerate Demand. Sources cite that the decrease in the Demand for Natural Gas is anticipated to be down on lower LNG( Liquified Natural Gas) exports due to maintenance issues at a few Gulf Coast terminals and pipelines feeding Gas to them.
Moreover, the increased cost of Gas is likely to result in increased use of other energy sources like coal.As per the reports from Refinitiv, the output of the Gas from the lower 48 American states had averaged 91.7 bcfd(billion cubic feet per day) in June, increased from 91.0 bcfd as per last month. However, it is still below the monthly record high of 95.4 bcfd in Nov. 2019.
U.S EIA(Energy Information Administration) stated that U.S. natural gas production is expected to increase in 2021 after failing the previous year due to COVID-19.Meanwhile, domestic natural gas Demand is anticipated to decline for two consecutive years in 2021, the agency further added.As per EIA projections, dry gas production is expected to increase to 92.18 bcfd in 2021 and 93.93 bcfd in 2022 as compared to 91.35 bcfd last year and a record high of 93.06 bcfd in 2019.
Experts believe that the market is currently undergoing long liquidation as it has recorded a drop in open interest by -15.66% to close at 19141 along with prices down -0.9 rupees.The natural gas market is currently getting support at 226.4 with a resistance of 230.7.However, the market is expected to see a test of 224.4 and 233 levels on the upper side and lower side, respectively.