Gold Silver Reports — Natural gas on MCX settled up 1.05% at 163.70 rose to a new five-month high Monday as warming weather forecasts keep stoking expectations for rising demand.
Prices are now up in five of the last six sessions and have set new intraday highs dating back to January in each of the last four sessions. Prices on MCX are getting support from Nymex Natural Gas prices which has gained 26% since the June contract expired at just $1.963/mmBtu on May 26.
Nymex July’s contract hasn’t traded below $2/mmBtu since early March, and summer prices are often higher because of increasing demand for gas-fired power to run air conditioners. That has spurred much of the rally, along with slight declines in production and a record-low number of working rigs that has some traders expecting larger production declines on the way. While updates from both MDA Weather Services and Commodity Weather Group two widely watched private forecasters—showed temperatures across the Plains, Midwest and South far warmer than they had Friday.
Despite the recent price increase, natural gas prices remain below the “pivotal” $2.50/MMBtu mark while on MCX 170 level will be cruscial this will prove to be a strong resistance for prices. Also Surplus storage will need to continue to shrink and US gas production needs to continue to decline. Gains were capped amid concerns over record-high storage levels. Total US natural gas storage stood at 2.907tcf as of last week, according to the US EIA, 24.5% higher than levels at this time a year ago. Technically market is getting support at 161.2 and below same could see a test of 158.8 level, and resistance is now likely to be seen at 166, a move above could see prices testing 168.4. — Neal Bhai Reports