Gold Silver Reports – Natural gas on MCX settled down -3.12% at 111 as warmer temperatures in the Northeast and Midwest last week cut demand for natural gas sharply. Cooler temperatures late this week will give way to rising temperatures again next week. The official storage injection season begins in April, so there is not much time left for natural gas inventories to fall. That could spell continued low prices throughout the summer and into the next heating season beginning in October. Yesterday Nymex Natural gas prices bounced off 17-year lows in North American trade, after data showed U.S. natural gas supplies in storage fell more than expected last week.
The US Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended February 26 declined by 48bcf, more than expectations for a decline of 41 billion. That compares with draws of 117bcf in the prior week, 198bcf in the same week last year and a five-year average of around 138 billion. Total U.S. natural gas storage stood at 2.536 trillion cubic feet, 31.3% higher than levels at this time a year ago and 26.3% above the five-year average for this time of year.
Market experts worry there may be too much gas left in storage at the end of March when utilities traditionally start injecting the fuel back into storage for the next winter. A day earlier, natural gas futures sank 3.67%, as weather models kept pointing to higher-than-normal temperatures during the first ten days of March, dampening late-winter heating demand. Technically market is getting support at 110.3 and below same could see a test of 108.8 level, and resistance is now likely to be seen at 113.9, a move above could see prices testing 116. – Neal Bhai Reports