The price of natural gas yesterday increased by 1.83% to 211.6 due to projections for colder this week and warmer next week, which should increase demand more than initially anticipated through early June. Low levels of wind energy in recent weeks have pushed power companies to burn more gas to make electricity, which has helped support gas prices.
The price increase occurred despite record U.S. gas production and a resumption of Canadian exports to levels prior to the last three weeks when wildfires in Alberta and other western provinces forced energy companies to halt some oil and gas production. Average gas production in the Lower 48 States of the United States has increased to 101.5 billion cubic feet per day (bcfd) so far in May, according to data source Refinitiv. This would surpass April’s monthly record of 101.4 bcfd.
On Wednesday, the volume of petrol exported from Canada to the United States was anticipated to maintain close to a nearly three-week high of 8.1 bcfd. The weather in the Lower 48 states was expected to alternate between cooler-than-average conditions from May 24-28 and warmer-than-normal conditions from May 31–June 3 before returning to generally normal conditions from June 4–8.
Technically, the market is under short covering because open interest has decreased by -7.25% to settle at 18665 while prices have increased by 3.8 rupees. Currently, natural gas is receiving support at 208, and a move below that level could result in a test of 204.4 levels. On the other hand, a move above that level could result in a test of 217.2.
