Natural gas on MCX settled up 2.87% at 265.4 on forecasts for a colder start to the new year than previously expected, reviving concerns there may not be enough fuel in storage for the winter heating season. Meteorologists predicted the weather would turn near normal to a little colder than normal through the first week of January after remaining warmer than usual until Dec. 28. Warm weather so far this month has allowed utilities to leave more gas in storage than usual so far in December. However, the coming cold will boost heating demand and likely stop utilities from cutting the vast storage deficit in early January.
Total U.S. consumption of natural gas fell by 16% compared with the previous report week, according to data from the EIA. Stockpiles are now 21 percent below normal for this time of year and at their lowest in 16 years. Since early November, the combination of changing weather forecasts and low stockpiles has kept futures volatility at its highest in years. With the weather turning seasonally colder after the U.S. Christmas holiday, Refinitiv projected gas demand in the Lower 48 states would rise to 105.2 billion cubic feet per day (bcfd) next week and 115.8 bcfd during the first week of the new year, up from 101.0 bcfd this week. Gas output in the Lower 48 has averaged a near record high of 87.3 bcfd in the past 30 days.
Technically market is under fresh buying as market has witnessed gain in open interest by 14.16% to settled at 2104 while prices up 7.4 rupees, now Natural gas is getting support at 256.2 and below same could see a test of 247 level, and resistance is now likely to be seen at 271, a move above could see prices testing 276.6.
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