Naturalgas On MCX Settled Down -0.57%

Naturalgas on MCX settled down -0.57% at 191.40 continuous its downtrend as updated weather forecasting models continued to point to increased summer demand in the coming weeks. But yesterday prices recovered from the day's low of 190.30 after data showed that natural gas supplies in storage in the US rose less than expected last week. The US EIA said in its weekly report that natural gas storage in the U.S. rose by 57bcf in the week ended July 7, while forecast an increase of 59 billion.

Total U.S. natural gas storage stood at 2.945tcf, 8.9% lower than levels at this time a year ago and 6.2% above the five-year average for this time of year. Before the report was released, natural gas had been seeing its second day of profit-taking Thursday as investors locked in gains from a rally earlier in the week as updated weather forecasting models continued to point to increased summer demand in the coming weeks.

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. While hot high pressure with highs of 90s and 100s will dominate most of the country to drive strong demand for cooling. There will be exceptions across the northeastern US where highs of upper 60s and 70s are expected.

A weak weather system will bring showers and minor cooling across the Great Lakes and East this weekend to slightly ease national demand, although hot high pressure will bounce back next week with a return of upper 80s to 100s across much of the country. Overall, Nat gas demand will be high to very high besides the northeastern US.

Technically market is under long liquidation and getting support at 189.5 and below same could see a test of 187.6 level, and resistance is now likely to be seen at 194.1, a move above could see prices testing 196.8.

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Suhani Verma

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