Naturalgas on MCX settled up 1.39% at 174.90 rebounding slightly from losses in the previous session, with traders betting a steep fall may be petering out. Natural-gas prices fell to a six-month low Tuesday, posting losses of nearly 10%--their second- largest for any one session this year. But bargain buyers are steering the market higher Wednesday, betting that it will be difficult for gas prices to keep going down. Natural gas consumption is seasonal, with spikes in demand occurring in winter months. As such, storage levels build up over the course of the year, especially in the milder months of spring and fall. Then, gas is used up in the winter. The winter of 2016 was the warmest on record, leading to a paltry drawdown in inventories. The result was a cratering of natural gas prices last year as inventories swelled following the end of winter. This winter things were supposed to be much tighter. Based on data from the NOAA, this year’s extremely warm winter has pushed heating demand for natural gas to nearly 20% below average. Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 86 and 97bcf in the week ended February 17. That compares with a withdrawal of 114bcf in the preceding week, 117 billion a year earlier and a five-year average drop of 158bcf. Total natural gas in storage currently stands at 2.445tcf, according to the U. S. Energy Information Administration, 12.4% lower than levels at this time a year ago and 3.5% above the five-year average for this time of year. Technically market is under short covering and getting support at 170.3 and below same could see a test of 165.7 level, And resistance is now likely to be seen at 178.2, a move above could see prices testing 181.5.

Trading Ideas:

# Naturalgas trading range for the day is 165.7-181.5.

# Naturalgas recovered on short-covering as traders betting a steep fall may be petering out.

# NOAA said this year’s extremely warm winter has pushed heating demand for natural gas to nearly 20% below average.

# Market looked ahead to weekly storage data due on Thursday, which is expected to show a draw of 86bcf.