Nat Gas yesterday increased by 2.95% to settle at 191.8 due to the prediction for hotter-than-normal weather in mid-to-late June, a decline in U.S. daily output, higher exports to Mexico, and low wind energy requiring generators to use more gas to make electricity. The price hike occurred despite maintenance-related decreased gas flows to liquefied natural gas (LNG) plants, expectations for milder weather and lower demand over the next two weeks than anticipated, and a decline in worldwide gas prices.
The average gas production in the Lower 48 States of the United States has decreased to 102.3 billion cubic feet per day (bcfd) so far in June from a monthly high of 102.5 bcfd in May. On Tuesday, however, output was anticipated to dip daily by around 1.7 bcfd to a preliminarily six-week low of 101.3 bcfd. That would represent the largest daily output decline since January, but analysts pointed out that preliminary data is sometimes changed later in the day.
The weather in the Lower 48 states was expected to be generally normal or slightly above normal through June 14, before becoming hotter than usual from June 15 to June 21. Exports from the United States to Mexico increased to an average of 7.5 bcfd so far in June from 5.9 bcfd in May.
Technically, the market is under short covering as open interest decreased by 12.4% to settle at 36872, while prices increased by 5.5 rupees. Currently, natural gas is receiving support at 187.6 and a move below that level could result in a test of the 183.3 level, while a move above that level could result in a test of the 198.3 level.
