Naturalgas dropped on profit booking in light trading day after prices gained Wednesday as storage data showed an unexpected decline from record-high inventories. The U. S. Energy Information Administration's weekly update on storage levels showed a fall of 2 billion cubic feet in the week ended Nov. 18, likely from stronger heating demand driven by colder weather. The shift from building inventories to the season's first withdrawal is a positive sign for natural gas, which has been under pressure in recent weeks as warmer-than-average weather has persisted in the U. S. Natural gas prices are dependent on weather forecasts because half of U. S. homes use natural gas for heat. Even with the drawdown, storage is still hovering near record high levels. Stockpiles are 1% higher than one year ago, and 6.3% above the five-year average, according to EIA data. Wednesday's number is also lower than the five-year average of a decline of 27 bcf for the date. Recently prices were under pressure from warmer-than-average temperatures this month, as well as a record level of supply in storage. However, the approach of the winter season and colder temperatures has given prices a boost, as investors bet that heating demand will pick up and help work through high levels of inventory. Exports of natural gas have also exceeded imports this month, as a positive development for future demand. However, without a substantial pick up in winter demand, natural gas prices may still face challenges in the coming months. Technically market is under long liquidation as market has witnessed drop in open interest by -12.38% to settled at 2958, now Naturalgas is getting support at 206.9 and below same could see a test of 205.1 level, And resistance is now likely to be seen at 210.1, a move above could see prices testing 211.5.

Trading Ideas:

Naturalgas trading range for the day is 205.1-211.5.

Naturalgas dropped on profit booking in light trading day after prices gained Wednesday as storage data showed an unexpected decline in inventories.

Prices also saw pressure as warmer-than-average weather has persisted in the U. S.

Natural gas prices are dependent on weather forecasts because half of U. S. homes use natural gas for heat.