Commodity Weekly Insights : Natural Gas Report By Geojit Financial Services
NYMEX Natural Gas futures hover at monthly high
US Henry Hub natural gas futures have reached a one-month high due to lower output and increased demand for liquefied natural gas (LNG) export plants. The amount of gas flowing to the eight big LNG export plants operating in the US hit a monthly record of 16.0 billion cubic feet per day in April. Meanwhile, the flows declined so far in May, with the average amount of gas flowing to LNG export plants fell to 14.9 bcfd so far in May. Due to a mild weather expected through late May, which should keep heating and cooling demand low, utilities are likely to continue injecting more gas into storage than usual for this time of year. This could potentially lead to record-breaking gas storage levels in May, surpassing the all-time monthly high of 494 billion cubic feet set in May 2015. The NYMEX natural gas futures surged 7.29% in the last monthly period and hovered near USD 3.784 per MMBTU. Meanwhile, MCX natural gas futures marked 5.68% monthly gain and hovered around Rs. 321.50 per MMBTU.
Russia and US are in talks on Russian gas flows to Europe
Russia and US authorities discuss resuming the Russian gas shipments to Europe, which is being halted on the wake of war in eastern Europe. The Russian gas exports to Europe were slashed after the Nord Stream pipelines under the Baltic Sea were blown up in 2022. At the start of this year, gas flows via Ukraine came to a halt after Kyiv refused to renew a transit agreement. With US president Donald Trump pushing for peace in Ukraine, raised the prospects of reinstating the gas supplies.
Money managed positions NYMEX
Natural Gas F&O Money managers reduced their long positions and short positions in Henry hub Natural Gas futures and options contracts in NYMEX platform the week ended on May 09, the U.S. Commodity Futures Trading Commission (CFTC) reported. The net long positions remained below zero.
U.S. Natural Gas storage
The Energy Information Administration reported that the natural gas stored in the underground storage utilities in the U.S. increased by 104 billion cubic feet (bcf) in the week ended May 02. The total working natural gas storage at underground facilities are 2145 billion cubic feet. The storage level is 16.1% below the level seen at same period a year ago, and 1.4% higher than 5 year average.
NYMEX Natural Gas:
Sustained trades above $3.40 region may offer upward moves, and the momentum may accelerate with solid trades above $3.90 region. However, a dip below $3.40 support could negate this expectation, and can act as early indication for a trend reversal
MCX Natural Gas:
Prices expected to extend north bound trades in the near monthly period. However, a fall below Rs.305 level may be an early sign for weakness.
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