On MCX Settled Up 0.16% At 188.10 - Naturalgas

On MCX settled up 0.16% at 188.10 little changed in yesterday’s session one day after suffering its biggest daily loss since January as updated weather forecasting models pointed to weak demand in the weeks ahead. Significant fall had been seen on Monday after updated forecasts for a cooler early summer across the Midwest and Northeast, meaning utility customers will use a lot less air conditioning.

A cool front will sweep across the eastern U.S. the next few days with heavy showers and powerful thunderstorms, thereby dropping highs into the upper 60s and 70s with little demand for heating or cooling. Longer-term models showed considerably cooler temperatures for late next weekend into the following week as weather systems over southern Canada advance more aggressively into the northern and eastern US. 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.

Total natural gas in storage currently stands at 2.709tcf, according to the U.S. EIA, 10.6% lower than levels at this time a year ago but 8.4% 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 49 and 60bcf in the week ended June 16. 

That compares with a gain of 78bcf in the preceding week, an increase of 62 billion a year earlier and a five-year average rise of 82bcf. Technically market is getting support at 186.6 and below same could see a test of 185.2 level, And resistance is now likely to be seen at 188.9, a move above could see prices testing 189.8.

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Suhani Verma

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