Naturalgas On MCX Settled Up 2.86%

Naturalgas on MCX settled up 2.86% at 194.4 extending their recovery from three-month lows as updated weather forecasting models pointed to increased summer demand in the weeks ahead. Temperatures will warm back into the upper 80s to 90s Fahrenheit late in the week over the southern and eastern U.S. as high pressure returns. Longer-term models showed the western, central, and southern U.S. will be very warm to hot through July 9, as high pressure dominates.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on summer heating 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.

Total natural gas in storage currently stands at 2.770 trillion cubic feet, according to the U.S. Energy Information Administration, 10.4% lower than levels at this time a year ago but 7.4% above the five-year average for this time of year. Market participants looked ahead to weekly storage data due on Thursday, which is expected to show a build in a range between 50 and 61 billion cubic feet in the week ended June 23.

That compares with a gain of 61 billion cubic feet in the preceding week, an increase of 37 billion a year earlier and a five-year average rise of 72 billion cubic feet. Technically market is under short covering as market has witnessed drop in open interest by -20.69% to settled at 3339 while prices up 5.4 rupees, now Naturalgas is getting support at 192.4 and below same could see a test of 190.5 level, And resistance is now likely to be seen at 195.6, a move above could see prices testing 196.9.

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Suhani Verma

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