Natural gas yesterday settled up by 1.6% at 222.70 rose after weather forecasts indicated that a cool snap hovering over the East Coast will give way to hotter temperatures and hike the need for air conditioning in the nation's households and businesses. Natural gas prices, pushed to a record high after hurricanes Katrina and Rita barreled through the Gulf of Mexico eight years ago, are now more vulnerable to winter freezes than tropical storms after production moved onshore with the growth of drilling in shale formations. The two storms that struck within a month of each other in 2005 cut Gulf gas output to as little as 4.52bcf per day from 10 billion, sending futures to $15.378per mbtu. By the time Hurricane Isaac went ashore in Louisiana seven years later, daily Gulf production was 4.09 billion, according to the EIA. Companies have reduced offshore work to concentrate on safer shale, from the Marcellus formation in the Northeast to the Barnett in Texas. Federal Gulf waters accounted for 6% of U. S. marketed gas production in 2012, compared with 24.4% in 2001, data from the EIA, the Energy Department's statistical arm, show. Hotter weather in the southwestern U. S. has ramped up demand for air conditioning, and rising temperatures predicted for the eastern half of the country should follow suit, which sent natural gas futures rising. Investors also spent the day waiting for official supply data due out Thursday. Now prices are getting support at 220.1 and below same could see a test of 217.5 level, And resistance is now likely to be seen at 224.5, a move above could see prices testing 226.3.

Trading Ideas:

Nat. Gas trading range for the day is 217.5-226.3.

Natural gas gained after a cool start to the week in the Northeast was expected to further slow inventory builds.

Above-average nuclear power plant outages also helped to firm near-term demand

Today natural gas storage: EXP: 96B PREV: 88B. Actual is at 8.00PM