Natural gas prices are rallying in yesterday session as recent weather forecasts favor cooler weather across much of the U.S., rising 5.08% to 196.60 and extending a rebound that has sent prices higher for four straight trading sessions. Natural gas prices had been held down by tepid demand amid one of the warmest winters on record, but forecasts now see temperatures falling below normal levels in the 6-10 day period and beyond.
The balmy conditions follow the warm winter of 2015-16, which had been intensified by El Niño, the Pacific weather pattern. When government forecasters looked ahead last autumn they eyed a winter about 12 per cent colder than last year, if still above normal. Instead, this heating season has been running 3 per cent warmer than last year, weighted for population, according to the US National Weather Service. Over the past 30 days, more than 700 monthly high temperature records were set across the country, while only one low record was made.
Now support seen as severe cold is predicted for the Northeast in the next few days. Chilly temperatures are also expected to return to the Midwest. Although the return of cold weather will limit the amount of surplus gas headed into storage, gains are likely to be limited because of technical factors and because of the amount of gas already in the storage facilities.
As Stockpiles also rose week over week from 10% below their levels of a year ago to 7.3% below last year’s level, and have reached 14.1% above the five-year average, nearly double week-over-week. Technically market is getting support at 190.5 and below same could see a test of 184.4 level, And resistance is now likely to be seen at 200, a move above could see prices testing 203.4.