Naturalgas on MCX settled down -0.29% at 209.40 fell in yesterday’s session continuing a small retreat from 2 1/2-month highs on mild weather may limit demand and the market’s ability to keep rallying. Natural gas prices appear to have found solid resistance at the 215.20 level, while according to temperatures vs normal averaged over the next 7-days are expected to be warmer than normal over a majority of the US besides the West Coast/NW.
This will result in limited demand for heating over the northern US, while only minor demand for cooling over the relatively warm southern US. A rather bearish map in terms of temperatures vs normal even as numerous weather systems traverse the country with rain and snow. They just aren’t very cold besides along the West Coast. While support had been seen as Hedge funds are more bullish about U.S. natural gas prices than at any time for almost three years, according to position records published by regulators and exchanges.
By April 4, hedge funds and other money managers had amassed a net long position in the two main futures and options contracts linked to U.S. gas prices equivalent to 3,280bcf. Fund managers had boosted their net long position for five consecutive weeks by a total of 1,082bcf, taking it to the highest level since May 2014. Hedge fund long positions outnumbered short positions by a ratio of nearly 3.6:1 on April 4, up from just 2.2 on Feb. 28, and nearing the recent high of 4.2 on Jan. 17. Now technically market is getting support at 207.6 and below same could see a test of 205.9 level, And resistance is now likely to be seen at 211.9, a move above could see prices testing 214.5.