Natural gas on MCX settled unchanged at 211.20 while prices recovered from day's low as support seen after the U.S. Energy Information Administration (EIA) reported that U.S. natural gas stockpiles decreased by 91 billion cubic feet for the week ending January 4. The market was expecting a storage withdrawal in a range of 50 billion to 115 billion cubic feet. The five-year average for the week is a withdrawal of 182 billion cubic feet, and last year’s withdrawal totaled 359 billion cubic feet, an all-time record driven by extremely cold weather along the east coast. Natural gas inventories fell by 20 billion cubic feet in the week ending December 28. The U.S. government and an updated weather forecast that may or may not show the return of cold temperatures later in the month.
The price action definitely shows investors are waiting for something but is the market creating a support base for a short-covering rally, or simply pausing before the next plunge in prices? A strong cold front will push across the Great Lakes and Northeast the next several days with lows reaching the 0s to 20s for strong demand. However, much of the rest of the country will be mostly mild with highs of the 40s to 70s to counter. Weather systems with rain and snow will track into the West Coast with rain and snow, but with only slight cooling. This weekend into early next week will bring weather systems across the southern and eastern US with rain and snow, followed by warming mid next week.
Technically now Natural gas is getting support at 208.2 and below same could see a test of 205.3 level, And resistance is now likely to be seen at 216, a move above could see prices testing 220.9.
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