Naturalgas on MCX settled down -2.61% at 231.60 as trader booked there long position pulling back prices after hitting a two-week high amid colder forecasts for the end of January. It appears that forecasts for warmer weather was the impetus behind yesterday's halt in the recent advance. According to natgasweather.com, temperatures this week will be much above normal, especially in regards to overnight lows. Wednesday night lows will be 10-40 degrees warmer than normal over much of the U.S., resulting in anemic natural gas demand. Natural-gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns. Prices typically rise during the winter as colder weather sparks indoor-heating demand. About half of U.S. homes use natural gas for heating. Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 220 and 230bcf in the week ended January 13. That compares with a withdrawal of 151bcf in the preceding week, 178 billion a year earlier and a five-year average drop of 170bcf. Total natural gas in storage currently stands at 3.160tcf, according to the U.S. EIA, 10.3% lower than levels at this time a year ago and around 0.1% below the five-year average for this time of year. Open interest has not been supportive in the recent advance, as the number of outstanding natural gas futures contracts declined 3.6% from the December 9th closing low through last Friday’s close. Thus, it appears first support may be vulnerable to a break over the near term. Technically market is getting support at 226.9 and below same could see a test of 222.1 level, And resistance is now likely to be seen at 237.9, a move above could see prices testing 244.1.

Trading Ideas:

Naturalgas trading range for the day is 222.1-244.1.

Natural gas prices ended lower, pulling back after hitting a two-week high amid colder forecasts for the end of January.

Natural gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns.

Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 220 and 230 bcf.