Naturalgas on MCX settled down -0.15% at 196.50 traded in the range while prices bounce up again from the day's low helped by cooling weather, stable production and a larger-than-expected draw from storage last week. Natural gas is now up in seven of the past eight sessions. Prices are still down about 20% year-to-date because of a historically warm winter that sapped heating demand, but some expect big changes in the gas market--notably lower production growth and new sources of demand--to keep prices in check.
Yesterday the U.S. EIA said in its weekly report that natural gas storage in the U.S. fell by 68bcfin the week ended March 3. That compared with a build of 7bcfin the preceding week, a decline of 57 billion a year earlier and a five-year average decline of 136bcf. Total U.S. natural gas storage stood at 2.295tcf, 7.7% lower than levels at this time a year ago and 18.8% above the five-year average for this time of year.
Meanwhile, traders continued to monitor shifting weather forecasts to gauge demand for the fuel. At the same time, the southern half of the U.S. will be warmer than normal as high pressure dominates with highs reaching the 60s to 80s Fahrenheit. Prices of the heating fuel are down around 22% so far this year as forecasts for warm winter weather weighed on heating demand expectations.
Based on data from the NOAA, this year’s extremely warm winter has pushed heating demand for natural gas to nearly 20% below average. Technically market is getting support at 193.4 and below same could see a test of 190.2 level, And resistance is now likely to be seen at 199.6, a move above could see prices testing 202.6.