Naturalgas on MCX settled down -6.96% at 172.50 as the prospects for a last winter freeze faded, and traders were looking forward to the possibility of El Nino this summer. Pressure seen as Nymex Natural gas futures for March plummeted 9.5 percent to $2.56 per MMBtu. Natural gas was down about 7 percent last week on the combination of strong supply and warm weather and is now 35 percent below the winter peak late last year.
Gas in storage is also running above the five-year average. Meteorologists also see signs that an El Nino condition is developing in the Pacific, a weather pattern created by warmer water temperatures in the Pacific. El Nino creates more disturbances in the Pacific but tends to make for cooler summers on the east coast, another negative for natural gas consumption Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 86 and 97bcf in the week ended February 17.
That compares with a withdrawal of 114bcf in the preceding week, 117 billion a year earlier and a five-year average drop of 158bcf. Total natural gas in storage currently stands at 2.445 trillion cubic feet, according to the U.S. Energy Information Administration, 12.4% lower than levels at this time a year ago and 3.5% above the five-year average for this time of year.
Without significant demand for natural gas, inventories could stay near record levels and may even continue to pull prices even lower. Technically market is under fresh selling as market has witnessed gain in open interest by 11.25% to settled at 11607, now Naturalgas is getting support at 167.3 and below same could see a test of 162 level, And resistance is now likely to be seen at 182.2, a move above could see prices testing 191.8.