Natural gas yesterday traded with the negative node and settled -3.47% down at 124.00 as last week's bearish supply report renewed concerns about the massive domestic supply glut. Market participants largely shrugged off forecasts for warmer weather across key parts of the US through mid-June. Concerns over elevated US storage level re-emerged after the US EIA said last week that natural gas storage in the US rose by 62bcf 2.87tcf last week, the highest ever for this time of year and 33% above the 5year average. The larger than expected increase raised worries about where excess gas will be stored later this year. Prices have been on the decline since touching a
3month high of $2.82 on May 21. Despite the recent run of losses, natural gas prices are still up 18% since touching a decade-low of $1.90 on April 19, amid indications major North American natural gas producers were cutting back on production. Speculation that utility providers in the US were switching from pricier coal to cheaper natural gas provided further support over recent weeks. However, market players noted that sustained prices back above $2.50 and toward the $3-level likely would inspire some switching back to coal. For today's session market is looking to take support at 122.3, a break below could see a test of 120.5 and where as resistance is now likely to be seen at 127, a move above could see prices testing 129.9.

Trading Ideas:

Nat. Gas trading range for the day is 120.53-129.93.

Natural gas ended lower as last week's bearish supply report renewed concerns about supply glut.

The larger than expected increase raised worries about where excess gas will be stored.

Utility providers in the US were switching from pricier coal to cheaper natural gas provided support.