Natural gas settled down by -0.87% at 228.1 reversing earlier gains, as investors took a breather from a six-day rally and awaited further clues to demand trends this winter. Expectations for cold weather have pushed natural gas prices higher in recent weeks, since the commodity is used to heat homes and buildings and sees an uptick in consumption when temperatures fall. However, record-high inventories remain a challenge for natural gas prices. Last week, the U. S. Energy Information Administration reported natural-gas stockpiles declined 2 billion cubic feet, marking the first withdrawal of the winter season. Investors will be watching the most recent storage data to see if the trend continues, scheduled to be released by the EIA on Thursday. The market's recent gains have reversed losses from a warmer-than-average November, which put pressure on natural gas and sent prices to a three-month low. Most of the country may see a mix of average and below-normal temperatures Dec. 8 through Dec. 12, according to MDA Weather Services. Chicago's low will probably drop to 18 degrees Fahrenheit (minus 8 Celsius) on Dec. 9, 6 below the usual reading, data from AccuWeather Inc. show. Gas prices are gaining ground as frigid weather creeps into December forecasts, prompting speculation that an extended chill will cut into record stockpiles of the fuel. Rising gas exports and a slowdown in output from shale formations have stoked demand, leaving the market vulnerable to supply constraints during the winter. Technically market is under long liquidation as market has witnessed drop in open interest by -1.49% to settled at 4553 while prices down -2 rupee, now Naturalgas is getting support at 224.8 and below same could see a test of 221.4 level, And resistance is now likely to be seen at 232.3, a move above could see prices testing 236.4.

Trading Ideas:

Naturalgas trading range for the day is 221.4-236.4.

Natural gas dropped as investors took a breather from a six-day rally and awaited further clues to demand trends this winter.

Expectations for cold weather have pushed natural gas prices higher in recent weeks.

Last week, the U. S. EIA reported natural-gas stockpiles declined 2 billion cubic feet, marking the first withdrawal of the winter season.