Natural Gas settled up 4.68% at 281.90 shot up on Thursday after official data revealed that U.S. natural gas supplies rose less than expected last week. The US EIA said in its weekly report that natural gas storage in the U.S. in the week ended June 6 rose by 107bcf, below forecasts for an increase of 110bcf. Total U.S. natural gas storage stood at 1.606tcf. Stocks were 727bcf less than last year at this time and 877bcf below the five-year average of 2.483tcf for this time of year. Producers would need to add approximately 2.5tcf to storage by November 1 to meet typical winter demand. Forecasts for warmer weather fueled the rally as well. Natgasweather.com reported earlier that weather models called for warmer temperatures to settle over the coming days, while the possibility of a tropical weather system developing in the Gulf of Mexico pushed up prices as well. Tropical weather systems prompt energy companies to evacuate offshore rigs, which can disrupt supply. According to the CME Group data, the natural gas futures are currently trading in a slightly backwardated market – longer dated contracts are cheaper than near-term contracts. A futures-based commodity ETF, like UNG, would benefit if the underlying commodity is trading in backwardation. Since ETFs have to roll futures before maturity to avoid physical delivery of the commodity, a fund gains a profit every time it rolls to a cheaper later-dated futures contract in a backwardated market. Technically market is under fresh buying as market has witnessed gain in open interest by 21.99% to settled at 7007 while prices up 12.6 rupee, now Naturalgas is getting support at 272.7 and below same could see a test of 263.6 level, And resistance is now likely to be seen at 286.5, a move above could see prices testing 291.2.

Trading Ideas:

Naturalgas trading range for the day is 263.6-291.2.

Natural gas surged near to 5% gain since February after US stockpiles of the fuel increased at a slower rate than expected

EIA producers pushed 107 billion cubic feet of gas into storage for the week ended June 6, compared to 110 bcf.

Tropical weather systems prompt energy companies to evacuate offshore rigs, which can disrupt supply.