Natural gas on MCX settled down -3.71% at 220.40 dropped in the line of expectation hitting a lower low following a warmer than normal forecast released on Monday by the National Oceanic Atmospheric Administration. The weather is expected to be mild over the next 8-14 days for most of the United States. Last week prices rallied after the support seen after the report showed that the US EIA said in its weekly report that natural gas storage in the U. S. declined by 119bcf in the week ended January 20, exceeding market expectations for a drop of 117bcf. That compared with a withdrawal of 243bcf in the preceding week, 211 billion a year earlier and a five-year average drop of 176bcf. As support seen a colder system will sweep across the central and eastern U. S. later this week to finally end the current mild spell as overnight lows drop below freezing across all but the far southern U. S. Extended models pointed to colder conditions from January 31 through February 3, maintaining near to stronger than normal natural gas demand. Now market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 83 and 94bcf in the week ended January 27. Total natural gas in storage currently stands at 2.798 trillion cubic feet, according to the U. S. EIA, 11.1% lower than levels at this time a year ago and less than 1% below the five-year average for this time of year. Technically market is getting support at 217.4 and below same could see a test of 214.5 level, And resistance is now likely to be seen at 225.6, a move above could see prices testing 230.9.

Trading Ideas:

Naturalgas trading range for the day is 214.5-230.9.

Natural gas dropped to test 220 level following a warmer than normal forecast by the NOAA.

The weather is expected to be mild over the next 8-14 days for most of the United States.

Market participants looked ahead to weekly storage data which is expected to show a draw in a range between 83 and 94bcf in the week.