Gold Silver Reports — Natural gas on MCX settled down -0.17% at 175.10 overall prices traded in the range as traders are waiting for weekly inventory that is expected to show a heavy stockpiles which may continue to limit rallies.
Rally has come in part from summer weather likely to drive strong demand for gas-fired power, and from a slowdown in drilling activity and output from producers. But the rally has come so far so fast that many traders will now want to wait to see if hot weather, high power-sector demand and massive output comes actually come to fruition.
Stockpiles likely grew last week to 3 trillion cubic feet, 26% above levels from a year ago and 30% above the five-year average for the same week, according to The Wall Street Journal. They expect the U.S. Energy Information Administration to report a 66 billion-cubic-feet increase for stockpiles as of last week when they agency gives its weekly update Thursday.
Stockpiles typically build this time of year when production is strong and there is no demand for gas-fired heat. But they are exceptionally large and may set records later this summer because the last winter was so warm and heating demand so tepid that it left a record amount of gas in U.S. storage for the start of spring. While updates from both MDA Weather Services and Commodity Weather Group LLC-2 widely watched private forecasters–keep showing unseasonably warm temperatures stretching deeper into June.
Natural Gas MCX Trading Zone
More than half the country will be awash in temperatures 3 to 15 degrees Fahrenheit above normal by the last week of the month, according to MDA. Technically now Natural gas is getting support at 173.8 and below same could see a test of 171 level, and resistance is now likely to be seen at 176.8, a move above could see prices testing 179.