Natural gas yesterday traded with the negative node and settled -4.7% down at 119.5 in the line of expectation as US over supply concerns and a mild winter continue to weigh on the heating fuel. Natural gas prices have dropped nearly 17% since Monday. Yesterday, prices booked the largest January loss in three years spiking down 7.8% on forecasts of continued mild winter weather and increased production levels signaled no end to the supply glut. Industry weather group, MDA EarthSat stated that it forecasts colder than normal temperatures throughout the US east coast and southern states over the next 11 to 15 days, resulting in a short lived rally. Earlier, adding to the bearish environment, US NOAA stated that it expects the warmer than normal winter temperatures on the East Coast, Midwest and much of the Southwest to continue through mid February adding to the long term bearish sentiment. Official data last week indicated that US gas supplies fell by 192 bcf. The drawdown was above the 184bcf withdrawn in the same week a year earlier. Traders are anticipating EIA`s weekly report on natural gas stockpiles to ascertain current conditions. For today's session market is looking to take support at 116.7, a break below could see a test of 113.8 and where as resistance is now likely to be seen at 123.3, a move above could see prices testing
127.

Trading Ideas:

Natural Gas trading range is 113.8-127.

Natural gas settled down as US over supply concerns and a mild winter continue to weigh on the heating fuel.

Despite this significant drop, inventories remain at their highest level ever for this time of year.

Today natural gas storage: EXP: -129B PREV: -192B. Actual is at 9.00PM