Naturalgas on MCX settled down -4.05% at 206.30 as decline seen appears as sparked by updated weather forecasts that indicate mild weather across the mid-west, a development that may reduce the demand for natural gas. However, the overall weather forecast for the US is conducive to slightly stronger than normal natural gas use through the coming week, according to natgasweather.com. Thus, the prospects for continues weakness in prices over the near term appears questionable.
The central and southern US will continue to see highs of 80s to near 90°F, with warming also now to push into the eastern US, including major East Coast cities. The West will be cooler than normal as fresh weather systems arrive off the Pacific. Cooling is expected to push into the central US late in the week, holding through the weekend, including into Texas. Cooling is expected to reach the east-central US next week, thereby keeping slightly stronger than normal nat gas use ongoing.
Meanwhile, market participants looked ahead to weekly storage data due on Thursday, 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.
Total natural gas in storage currently stands at 2.301 trillion cubic feet, according to the US EIA, 13.9% lower than levels at this time a year ago but 12.0% above the five-year average for this time of year. Technically market is getting support at 202.8 and below same could see a test of 199.3 level, And resistance is now likely to be seen at 212.9, a move above could see prices testing 219.5.