Naturalgas on MCX settled up 1.37% at 200.3 with traders betting that low production and rising demand for exports mean supplies are tightening despite waning cold weather. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. declined by 150 billion cubic feet in the week ended March 17, matching forecasts. That compared 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 2.092 trillion cubic feet, according to the U.S. Energy Information Administration, 16% lower than levels at this time a year ago but 12.7% above the five-year average for this time of year. Meanwhile, updated weather forecasting models showed that warm to mild conditions will dominate most of the U.S., even as a spring-like weather system with heavy showers and thunderstorms impacts the central U.S.
The 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. Prices of the heating fuel are down around 20% 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.
Technically market is under short covering as market has witnessed drop in open interest by -0.25% to settled at 4776 while prices up 2.7 rupees, now Naturalgas is getting support at 197.8 and below same could see a test of 195.4 level, And resistance is now likely to be seen at 202, a move above could see prices testing 203.8.