MCX Natural Gas Tips – Above 142 Buy Target 158—162 – Neal Bhai
US shale oil production shut-in announcements have increased materially in the past two weeks. And after the record setting negative WTI contract move on Monday, we are likely to see even more pronounced shut-in announcements in the coming weeks.
For natural gas, this will directly benefit gas prices, and we are seeing this first reflected in the Waha gas basis differentials. This is what Permian producers get and remember our article from last week titled, “An Asymmetric Bet? Traders Betting On A Rise In Permian Gas Prices – NGF 4/16.” Basis differentials have nearly narrowed by ~40% already.
