Naturalgas settled down -1.94% at 232.30 after investors locked in gains stemming from warm U.S. weather forecasts and sold the commodity for profits. Forecasts for seasonably warm weather hovering over the Midwest and eastern U.S. sent natural gas prices climbing to levels ripe for profit taking on Wednesday. Warm weather this time of year sends natural gas prices rising as investors bet thermal power plants will burn more of the commodity to meet demand for air conditioning. Still, rain and thunderstorms could cool parts of the country off in the coming days, which also fueled profit taking. "While this week will be warmer, there will be enough weather systems tracking across the country with cloud cover and cool temperatures to again expect another larger than normal build for next week’s EIA release, albeit leaner than recent builds," Natgasweather.com reported earlier in its Aug. 20-26 forecast. Supply data remained in focus as well. The U.S. EIA’s weekly storage report slated for release on Thursday is expected to show an increase of 82bcf in the week ending Aug. 15. Inventories rose by 58bcf in the same week a year earlier, while the five-year average change is a build of 48bcf. Injections of gas into storage have surpassed the five-year average for 17 consecutive weeks, alleviating concerns over tightening supplies. Total U.S. natural gas storage stood at 2.467 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 18.9% from 20.3% a week earlier and down from a record 54.7% at the end of March. Technically market is under long liquidation and getting support at 229.8 and below same could see a test of 227.2 level, And resistance is now likely to be seen at 235.6, a move above could see prices testing 238.8.

Trading Ideas:

Naturalgas trading range for the day is 227.2-238.8.

Natural gas dropped on profit taking after investors locked in gains stemming from warm U.S. weather forecasts.

Still, rain and thunderstorms could cool parts of the country off in the coming days, which also fueled profit taking.

U.S. Energy Information Administration’s weekly storage report slated for release is expected to show an increase of 83 bcf.