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Natural gas prices extended gains after two weeks of consolidation to the highest levels since Mid–Dec 2018

Henry hub Natural gas future prices surged to fresh 31 month high on projection of hotter weather condition in US over the next two weeks. US Gas demand from the power sector and steady demand from Asia and Europe continued to back the prices.

Henry hub natural gas front month future contract advanced higher in previous week by claiming above USD 4 per MMBtu after six days of straight gains . MCX natural gas prices settled at INR 302 per MMBtu by marking more than 10.00 percent gain.

U.S. Natural gas is on upside trajectory

* U.S. forecast of warm weather in next few days including the hottest of the summer in Texas , with highs of mid-80s and 90s in the South and highs of 90s and 100s over swaths of the Midwest and West. Whereas particularly hot in parts of Upper Midwest and northern plains, with highs in the upper 90s as far north as the Dakotas and triple-digits highs.

* Constant demand from Asia, Europe and Mexico supported the price sentiments.

* Gas demand from Power sector continue to outperform this summer and possibly to major chunk of generation mix.

* Natural gas speculators in four major Nymex , ICE markets cut net long position by 16.237 contracts to 340.647 in Week to July 20.

U.S. Natural gas exports to Mexico marked a news monthly record in June 2021

Natural gas pipeline exports from the United States to Mexico surpassed 7 billion cubic feet per day on multiple days during June, according to data from Wood Mackenzie. The highest amount of pipeline exports, 7.4 bcf per day, was sent out on June 17. Over the past few years, Mexico has expanded its natural gas pipeline infrastructure and has relied increasingly on imported natural gas from U.S. pipelines. Pipeline imports accounted for 76% of Mexico’s total natural gas supply in June 2021, compared with 40% in June 2015.

U.S. Natural Gas storage increased in previous week

US government said the country’s natural gas storage industry posted addition in its latest report. Working gas in storage was 2,678 Bcf as on July 16, 2021, according to EIA estimates. This represents a net increase of 49 Bcf from the previous week. Stocks were 532 Bcf less than last year at this time and 176 Bcf below the five-year average.

NYMEX: Outlook continue to be positive as long as the support of $3.40 remain undisturbed. A close below the same is a sign of weakens.

In MCX, if the 260 support remain hold the downside, expect rallies to continue in near term. A close below the same is a sign of weakness.

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