Naturalgas On MCX Settled Down -0.41%

Naturalgas on MCX settled down -0.41% at 195.30 as investors continue to digest the latest weather reports. The price action suggests that investors may be trying to build a support base by holding the market in a range while waiting for the hot summer weather to return.

In other news, U.S. natural gas speculators cut their net long positions by the most on record as stockpiles remained unusually high after one of the warmest winters on record. Mild weather so far this spring and a slow but steady increase in production has also kept a lid on rallies.

Stockpiles are around 10 percent above normal for this time of year after utilities left excess gas in storage during one of the warmest winters on record, reducing the threat of price spikes later in the year. US production, meanwhile, averaged 71.7bcf per day over the past week, topping the same period in 2016 (70.8 bcfd) for the first time this year.

Warm to hot conditions will dominate the eastern ½ of the country this week as strong high pressure continues to dominate. Highs will reach the upper 80s to lower 90s, with upper 90s to 100s over the Southwest into Texas. Over the West, an unseasonably cold weather systems will bring heavy showers, including high elevation snowfall.

Late in the week, modest cooling will spill across the Northwest and Northeast, while the rest of the country remains very warm to hot. Overall, nat gas demand will be moderate to locally high. Technically market is getting support at 193.4 and below same could see a test of 191.6 level, And resistance is now likely to be seen at 198.1, a move above could see prices testing 201.

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Suhani Verma

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