Natural gas yesterday rallied and settled 2.18% up at 160.80 recouping a portion of the previous session's steep decline after updated weather forecasts called for above normal temperatures in the coming week. A bout of hot weather across much of the country over the last several weeks helped boost natural gas prices. Spot prices have rallied nearly 25% in the past three weeks, as extreme heat conditions in the US boosted demand for the fuel. Warmer than normal temperatures increase the need for gas fired electricity to power air conditioning, boosting demand for natural gas. Prices were also supported after last week's storage data, which showed US gas supplies rose by a less than expected 39bcf. US gas inventories did not hit the milestone 3tcf level until August 31 of last year. Market have expectation that without strong demand through the rest of the summer, gas inventories will reach the limits of available capacity later this year. Speculation that utility providers in the US were switching from pricier coal to cheaper natural gas helped boost prices off a 10-year low of $1.902 hit in mid-April. For today's session market is looking to take support at 157.4, a break below could see a test of 153.9 and where as resistance is now likely to be seen at 163.1, a move above could see prices testing 165.3.
Nat. Gas trading range for the day is 153.93-165.33.
Natural gas rallied nearly 2% after updated weather forecasts called for above normal temperatures in the coming week.
Prices hit a seven-month high of 168.00 on Friday, before turning lower on profit taking.
Warmer than normal temperatures boosting demand for natural gas.