Weekly Outlook on Natural Gas

On a weekly basis, Natural gas prices dropped by 3.6%, traded at 175.10, due to increased production and forecasts indicating lower demand for the upcoming week than initially expected. Despite smaller storage injections over the past 10 weeks, reserves are still about 17% above the seasonal average. This surplus continues even though several producers cut production earlier this year when futures prices hit a 3 year low in March.

GAS Output: 

Financial firm LSEG reports that gas output in the Lower 48 states rose to an average of 102.4 billion cubic feet per day (bcfd) in July, up from 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May. This increase in output is approaching the record high of 105.5 bcfd set in December 2023.
NYMEX Natural Gas Trend:

The COMEX natural gas price has been exhibiting a bearish trend over the past few weeks. On a weekly timeframe, the price has consistently traded below the trendline, with the Relative Strength Index (RSI) indicating a negative crossover. This suggests ongoing downward momentum. Key support levels are identified around $1.92 and $1.80, which could act as potential areas where the price might stabilize. Conversely, resistance levels are noted at $2.13 and $2.26, which could cap any short-term rallies.

MCX Natural Gas Trend:

In the domestic market, the MCX natural gas price trend is also bearish. The price is trading below the Ichimoku Cloud and near the Middle Bollinger Band, suggesting bearish momentum in both the short and long term. Additionally, prices are trading below all the key Exponential Moving Averages and the rising trendline, reinforcing the bearish outlook. The momentum indicators show a negative crossover with lower trading volume, further supporting the downtrend. Significant support levels are observed at Rs. 160 and Rs. 138, where the price could find some stability. On the upside, resistance levels are pegged at Rs. 190 and Rs. 212, which could limit any upward movement. 

Important Levels: