Neal Bhai Reports — MCX Natural Gas Strat Buying Target 219-229 — Natural Gas on MCX settled up 0.6% at 217.7 driven by uncertainty about winter forecasts.
A series of smaller-than-expected injections of natural gas into storage has raised hopes that the overhang of supply is dissipating, helping to push prices to a 22-month high last week. Many market participants have been counting on a combination of winter heating demand and lower drilling activity to lead to higher prices. Natural gas production on the Norwegian Continental Shelf posted steep monthly and annual falls during September on the back of a heavy maintenance schedule last month, preliminary data showed.
Gas stocks typically rise between April and October and then draw down between November and March. But stocks have increased much more slowly than usual this year. Stocks have risen by less than the five-year average every week since the start of May, a total of 23 consecutive weeks, according to data from the U.S. Energy Information Administration.
The result is that the gas market has swung from a huge surplus at the end of the first quarter close to balance by the end of the third quarter and is on track for a deficit in 2017.