Naturalgas settled down marginally at 276.10 edged lower on Friday, as investors cashed out of the market to lock in gains from a recent rally which took prices to the highest level in more than two years. Nymex Natural Gas contract soared 5.03% on Thursday to settle at USD4.489 per mbtu after government data showed that U. S. natural gas supplies fell by a record amount last week. But prices came under pressure on Friday as a break in the cold to milder weather prompted a correction in the market after the rapid price run up. On the week, Nymex natural gas prices advanced 2.59%, the seventh consecutive weekly gain. Thursday's natural gas storage report from the EIA said that natural gas supplies dropped by 285bct last week. Inventories fell by 70bct in the same week a year earlier, while the five-year average change for the week is a decline of 133bct. Total U. S. natural gas storage stood at 3.248 trillion cubic feet as last week, more than 13% below last year's unusually high level and nearly 7% below the five-year average for this time of year. Early withdrawal estimates for next week's storage data range from 135bct to 177bct, compared to a drop of 74bct during the same week a year earlier. The five-year average change for the week is a decline of 125bct. Trading volumes are expected to remain light in the week ahead due to the Christmas holiday and as many traders already closed books before the end of the year, reducing liquidity in the market and increasing the volatility. Technically market is getting support at 273.7 and below same could see a test of 271.3 level, And resistance is now likely to be seen at 278.9, a move above could see prices testing 281.7.

Trading Ideas:

Naturalgas trading range for the day is 271.3-281.7.

Natural gas settled flat as updated weather-forecasting models predicted a return of below-normal temperatures by the end of December allowed for choppy trading.

A warming trend currently taking place over the eastern U. S. will run through Dec. 25, which sent prices falling.

The U. S. Energy Information Administration said in its weekly report that natural gas storage in the U. S. fell by 285 billion cubic feet