Naturalgas on MCX settled down -3.65% at 187.30 in the line of expectation reversed course again driven by weekly supply data, which showed natural gas supplies in storage in the U. S. rose more than expected last week. The US EIA reported a weekly build of 51 bcf, while expectation was for an increase of 41 bcf. Natural gas prices rose on Wednesday on reports that a tropical storm in the Gulf of Mexico led to the shut-in of some 11% of natural gas production in the Gulf. By itself that would not have boosted prices by more than 2%, but combined with a weather forecast for continuing hot temperatures, the two were enough to lift prices temporarily. Overall demand for natural gas through the weekend is expected to be moderate in most areas of the country, with high demand in both the southern and eastern regions. Unless the weather drives higher demand for air conditioning, the U. S. physical storage limit of 4.3 trillion cubic feet could be tested by the time natural gas injection season ends in October. Also stockpiles remain about 7.5% above their levels of a year ago and about 11% above the five-year average. Although, unseasonably strong high pressure is expected to return next week east of the Rockies with above normal temperatures returning. Over the West, cooler conditions are expected as Pacific weather system move inland. Overall, nat gas demand will be MODERATE through the weekend and then HIGH next week with the southern and eastern US warming above normal. Technically market is getting support at 184.6 and below same could see a test of 182 level, And resistance is now likely to be seen at 192, a move above could see prices testing 196.8.

Trading Ideas:

Naturalgas trading range for the day is 182-196.8.

Natural gas extended losses after data showed that natural gas supplies in storage in the U. S. rose more than expected last week.

The U. S. EIA said in its weekly report that natural gas storage in the U. S. rose by 51 billion cubic feet in the week ended August 26.

Lastweek large speculators still maintained a net short position of 118,990 contracts - CFTC data showed.