Naturalgas settled down -1.72% at 268.50 after updated weather-forecasting models pointed to warmer temperatures settling in across much of the central and eastern U.S., though losses were limited due to calls for another shot of cold air to sweep across the country. Hedge funds became less bullish on natural gas for the first time in six weeks as the coldest weather in almost 20 years gives way to higher temperatures. A winter storm system that dumped snow across the central and northeastern U.S. left frigid temperatures in its wake, which hiked demand for natural gas at the country's thermal power plants as homes and businesses cranked up their heating. By Monday, natural gas prices fell on forecasts for a thawing trend, though longer-range models called for a return of colder temperatures. In its 8-14 day forecast, Natgasweather.com reported that the milder weather could edge out around Jan. 13 after a strong cold blast of cold air pushes through from the Rockies to the Plains and into the eastern U.S. afterwards. US supply levels also remained in focus. Total U.S. natural gas storage stood at 3.071tcf as of last week, approximately 16% below last year's unusually high level and nearly 9% below the five-year average for this time of year. Early withdrawal estimates for this Friday’s storage data range from 110bcf to 150bcf, compared to a drop of 126bcf during the same week a year earlier. The five-year average change for the week is a decline of 121bcf. Technically market is getting support at 265.7 and below same could see a test of 263 level, And resistance is now likely to be seen at 272.6, a move above could see prices testing 276.8.

Trading Ideas:

Naturalgas trading range for the day is 263-276.8.

Natural gas dropped after updated weather-forecasting models pointed to warmer temperatures settling in across much of the central and eastern U.S.

Losses were limited due to calls for another shot of cold air to sweep across the country.

Hedge funds became less bullish on natural gas for the first time in six weeks as the coldest weather in almost 20 years gives way to higher temperatures.