Naturalgas on MCX settled up by 2.22% at 230.50 recovered from the day's low turned higher as support seen after the US EIA reported that supplies of natural gas fell by 243bcf for the week ended Jan. 13. That was a higher than the decline of 238bcf expected by market players. Meanwhile, weather forecasts for the end of January turned warmer, which should dampen demand for the heating fuel. Weather models initially predicted colder temperatures throughout most parts of the U.S. during the period. 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. Natural gas prices are expected to remain depressed as the most recent forecasts for the last two weeks of January have turned warmer than previously expected, dampening expected demand for heating fuel. Winter weather is still in the forecast, but the very cold Arctic air flowing south from Canada will be missing. Daytime temperatures could reach the 40s through the 60s in the northern part of the country and top out at around 80 in the south. Stockpiles have now dropped to 12.9% below their levels of a year ago and 2.6% below the five-year average. The EIA reported that U.S. working stocks of natural gas totaled about 2.917tcf, around 77bcf below the five-year average of 2.994tcf and 431bcf below last year's total for the same period. Working gas in storage totaled 3.348tcf for the same period a year ago. Technically market is under fresh buying and getting support at 224.3 and below same could see a test of 218.2 level, And resistance is now likely to be seen at 234.2, a move above could see prices testing 238.

Trading Ideas:

Naturalgas trading range for the day is 218.2-238.

Natural gas rebounded from the day's low to finish the day with the gains of 2.22% as support seen after the data release.

Energy Information Administration said natural-gas stockpiles shrank by 243 billion cubic feet in the week ended Friday.

Winter weather is still in the forecast, but the very cold Arctic air flowing south from Canada will be missing.