Natural Gas settled 1.45% up at 179.30 in the line of expectation as support seen after the forecasts for mostly chilly US weather this week that should stir more heating demand despite concerns about record high supplies and an outlook for milder mid-month forecasts. But with inventories at record highs for this time of year and production at or near an all-time peak, most fundamental traders remain skeptical of the upside, particularly with the early chill expected to be short lived. After a chill over the next four to five days, private forecaster MDA EarthSat expects weather in the Northeast and Midwest, key gas-consuming regions, to warm to normal or above normal late in the week and next week. As prices for gas pushed well above $3 over the last two weeks, it became less competitive with coal and may have prompted some utilities that were burning cheaper gas for power generation to switch back to coal. There are also concerns that if gas prices move much higher, producers could opt to hook up wells that have been drilled but not flowing because gas prices below $3 were unattractive. Drilling for natural gas has been in a near-steady decline for the last year, but so far production has shown no significant sign of slowing. For today's session market is looking to take support at 176.2, a break below could see a test of 173 and where as resistance is now likely to be seen at 181.5, a move above could see prices testing 183.6.

Trading Ideas:

Nat.Gas trading range for the day is 173.03-183.63.

Natural gas ended higher backed by forecasts for mostly chilly U.S. weather that should stir more heating demand

Concerns about competition from low-priced coal may also be weighing on prices

U.S. inventories totaled 3.653bcf in the week ended Sept. 28, 8.3 percent above the five-year average for the period