Naturalgas on MCX settled down -0.78% at 204.70 came under pressure at the start of the week amid expectations of a drop in demand, after the latest U.S. weather model predicted mild temperatures over the next two weeks. Also colder than normal weather is expected to spread across most of the United States during the next 8-14 days which will reduce cooling demand during a period when the weather normally heats up.
Prices dropped but settle well of the lows of the session. Natural gas futures are down roughly 6% so far this week as the latest U.S. weather model called for mild temperatures over the next two weeks, which should reduce demand during that time. While weather condition at the south-central, southern, and eastern US will experience highs of 80s to near 90°F, including major East Coast cities to drive stronger than normal cooling demand.
The West will be chilly as Pacific weather systems sweep through. Cooling is expected to push into the central US late in the week, holding through the weekend, including Texas. Cooler than normal conditions are expected to reach the eastern US next week, keeping slightly stronger than normal nat gas use in place. Traders are now eyeing on the EIA's storage report due tonight which is expected to show a build in a range between 55 and 63bcf in the week ended May 12.
That compares with a gain of 45bcf in the preceding week, an increase of 73 billion a year earlier and a five-year average rise of 87bcf. Technically market is getting support at 202 and below same could see a test of 199.4 level, And resistance is now likely to be seen at 208.4, a move above could see prices testing 212.2.