Naturalgas on MCX settled down -1.29% at 198.20 on profit booking pulled back from the strongest level since February as traders continued to monitor shifting early-spring weather forecasts. Warm to mild conditions will dominate most of the U.S. this weekend, even as a spring-like weather system with heavy showers and thunderstorms impacts the central U.S.
Next week will be mostly mild to warm across the country with limited demand for heating or cooling besides the far northern U.S., according to forecasters at NatGasWeather.com. Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw of 147 billion cubic feet in the week ended March 17.
That compares with a withdrawal of 53 billion cubic feet in the preceding week, a build of 15 billion a year earlier and a five-year average drop of 21 billion cubic feet. Total natural gas in storage currently stands at 2.295 trillion cubic feet, according to the U.S. Energy Information Administration, 7.7% lower than levels at this time a year ago but 15.8% above the five-year average for this time of year. Prices of the heating fuel are down around 18% so far this year as forecasts for warm winter weather weighed on heating demand expectations.
Based on data from the National Oceanographic and Atmospheric Administration, this year’s extremely warm winter has pushed heating demand for natural gas to nearly 20% below average. Without significant demand for natural gas, inventories could stay near record levels and may even continue to pull prices even lower. Technically market is getting support at 196.6 and below same could see a test of 195.1 level, And resistance is now likely to be seen at 200.8, a move above could see prices testing 203.5.