Naturalgas On MCX Settled Down -1.22% At 202.50


Naturalgas on MCX settled down -1.22% at 202.50 edged lower for the fourth straight session on Tuesday, as mild spring weather dampened demand for the fuel. Weather systems will sweep across the Great Lakes and Northeast with showers and slightly cool temperatures through the end of the month. High pressure is expected to dominate the western and southern US with warmer than normal conditions during the period. Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on spring demand.
Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning. Natural gas prices still may be supported over the near-term by weather conditions. According to natgasweather.com, weather systems will impact the Southeast and North the next few days with showers and cooling, combining to drive slightly stronger than normal natural gas demand.
 
The south-central US to southern Great Lakes will be quite mild with highs of 60’s to 80’s, although a touch hot over south Texas with temperatures in the 90’s. As the week progresses, warm high pressure will build over the East with highs of 70’s to upper 80’s, locally 90’s driving modest early season demand for cooling. Next weekend will remain warm/hot over the southern and eastern US and cool over the west-central US. Overall, natural gas demand will be moderate.

Meanwhile total natural gas in storage currently stands at 2.115tcf, according to the US EIA, 14.8% lower than levels at this time a year ago but 13.3% above the five-year average for this time of year. Technically market is getting support at 201.1 and below same could see a test of 199.7 level, And resistance is now likely to be seen at 204.4, a move above could see prices testing 206.3. 
 
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Suhani Verma

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