Natural Gas yesterday traded with the positive node and settled 2.08% up at 163.60 pushed higher rising for a second successive session, as markets consolidated after last week’s steep selloff. A bout of hot weather across much of the US over the past several weeks had prompted power generators to burn more of the fuel to meet demand, easing a storage glut and pushing prices to the highest levels of 2012 early last week. But a report from the US EIA showing a larger than expected increase in natural gas storage levels sparked a steep sell-off. The EIA said that natural gas in storage grew by 28bcf to 3.217tcf for the week ended July 27. After a mild winter cut demand for natural gas to heat homes and businesses, sparking fears that supplies would exceed available storage capacity by the end of the year. Natural gas prices looked likely to remain supported amid hopes that hot weather could bolster the outlook for gas-fired utility demand. Meanwhile, the most active period in the Atlantic hurricane season has arrived, fuelling concerns that storms in the Gulf of Mexico could disrupt supplies from the region. For today's session market is looking to take support at 160.9, a break below could see a test of 158.1 and where as resistance is now likely to be seen at 165.5, a move above could see prices testing 167.3.

Trading Ideas:

Nat.Gas trading range for the day is 158.13-167.33.

Natural gas ended higher on heavy demand speculation and bottom fishing buying.

Gas demand perked up this year after prices in the spring slid to 10-year lows below $2 per mmBtu

In its Short-term Energy Outlook EIA trimmed its estimate for domestic natural gas production growth in 2012