Natural gas increased as more hot weather was predicted

With temperatures expected to stay above average until mid-August, there will continue to be a significant demand for air cooling, particularly in Texas. Nat. Gas yesterday settled up 7.1% at 227.2. The average gas production in the Lower 48 States of the United States has remained at 101.8 billion cubic feet per day (bcfd) so far in August, according to data source Refinitiv, matching that of July. In May, there were 102.2 billion cubic feet per day, a monthly record.

The Lower 48 States’ weather is expected to stay hotter than normal at least through August 19. The U.S. petrol demand, including exports, is expected to remain at 104.8 bcfd this week and the following week before increasing to 106.9 bcfd as power generators burn more fuel and exports increase. The estimate for the coming week was less optimistic than Refinitiv’s Thursday projection.

Because of the hot weather and increasing demand in Mexico’s electric power sector, U.S. natural gas pipeline exports to Mexico averaged around a record 6.8 billion cubic feet per day (Bcf/d) in June, according to the Energy Information Administration (EIA). In addition, the announcement highlighted that since Mexico’s domestic pipeline network is growing, shipments to Mexico have increased recently.

Technically, the market is under short covering as open interest has decreased by -38.41% to settle at 24519 while prices have increased by 15.1 rupees. Currently, natural gas is receiving support at 218 and a move below that level could result in a test of the 208.3 levels. Meanwhile, resistance is now likely to be seen at 232.8, and a move above could result in prices testing 237.9.

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