Naturalgas on MCX settled down -2.55% at 179.70 on fresh selling sliding back toward the lowest level since November as forecasts called for mostly warmer-than-normal weather in key regions across the U.S. for the rest of the winter. A fifteen-day weather forecast shifted moderately warmer over the past weekend, taking a toll on natural gas prices, which fell sharply in today’s trading. The contract for April settlement on the NYMEX lost $0.10, or 3.6%, with a close at $2.69/MMBtu.
Natural gas prices, in the recent rebound attempt however, buying was weak and it appeared as though the bounce was mainly in reaction to an oversold condition. The bias remained to the downside as natural gas prices recovered, given the fact that the February 21 decline was accompanied by a 1.8% increase in open interest.
This implies new money entering the market drove the sell-off. Typically, moves driven by rising open interest prove sustainable. Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 1 and 10bcf in the week ended February 24. That compares with a withdrawal of 89bcf in the preceding week, 48 billion a year earlier and a five-year average drop of 132bcf.
Total natural gas in storage currently stands at 2.356tcf, according to the US EIA, 2.5% lower than levels at this time a year ago and 6.6% above the five-year average for this time of year. Technically market is getting support at 177.7 and below same could see a test of 175.8 level, And resistance is now likely to be seen at 182, a move above could see prices testing 184.4.