Natural gas dropped because of winter weather forecasts that keep getting progressively warmer. The U. S. Energy Information Administration said natural-gas stockpiles shrank by 243 billion cubic feet. That compared with a withdrawal of 151 billion cubic feet in the preceding week, 178 billion a year earlier and a five-year average drop of 170 billion cubic feet. Total natural gas in storage currently stands at 2.917 trillion cubic feet, according to the U. S. Energy Information Administration, 12.9% lower than levels at this time a year ago and around 2.6% below the five-year average for this time of year. Meanwhile, weather forecasts for the end of January turned warmer, which should dampen demand for the heating fuel. The report is a widely watched measure of supply and demand and often a major driver for prices. Such a large draw from storage suggests smaller supply or greater demand than expected. A glut and historically low prices last winter led to massive cutbacks and the smallest number of active drilling rigs in history ahead of this winter heating season. About half of U. S. homes use natural gas for heat, making it typically the biggest driver for demand and prices. This winter has been relatively mild, but storage withdrawals from storage have far surpassed historical averages and analysts' projections anyway. The decline in drilling is a big part of that. Technically market is under long liquidation as market has witnessed drop in open interest by -5.76% to settled at 3403 while prices down -8.7 rupee, now Naturalgas is getting support at 218.3 and below same could see a test of 214.9 level, And resistance is now likely to be seen at 226.5, a move above could see prices testing 231.3.

Trading Ideas:

Naturalgas trading range for the day is 214.9-231.3.

Natural gas dropped because of winter weather forecasts that keep getting progressively warmer.

Total natural gas in storage currently stands at 2.917 trillion cubic feet, according to the U. S. EIA, 12.9% lower than levels at this time a year ago.

Meanwhile, weather forecasts for the end of January turned warmer, which should dampen demand for the heating fuel.