Naturalgas on MCX settled up 1.75% at 197.8 on data showing that inventories of the fuel grew far less than average for this time of year. Prices also seen supported increased concerns that a storm could hit the Gulf of Mexico. A tropical wave in the Atlantic Ocean has a 60% chance of developing into a tropical depression or a stronger type of storm in the next 48 hours, the National Hurricane Center. A storm could disrupt offshore natural-gas production in the Gulf of Mexico, reducing supplies and raising prices. However, hurricanes are less of a threat to natural-gas supplies than they have been in the past. As onshore production from shale rock has boomed in recent years, the Gulf of Mexico currently accounts for less than 5% of total domestic production. A storm in the Gulf of Mexico also has the potential to lower natural-gas prices, by reducing demand due to power outages or other damage. The U. S. Energy Information Administration said that natural-gas stockpiles grew by 11 billion cubic feet last week, less than the 19 bcf expected. That addition is one-sixth of the average addition for that week of the year. Inventories stand 12% above the five-year average for this time of year, a much smaller surplus compared with several months ago. That improving balance has been the driving force behind gas-price gains in the spring and summer that keep it hovering near one-year highs, said Peter Donovan, broker for Liquidity Energy in New York. Technically now Naturalgas is getting support at 192.8 and below same could see a test of 187.8 level, And resistance is now likely to be seen at 200.6, a move above could see prices testing 203.4.

Trading Ideas:

Naturalgas trading range for the day is 187.8-203.4.

Natural gas prices gained as support seen after data showing that inventories of the fuel grew far less than average for this time of year.

Prices also seen supported increased concerns that a storm could hit the Gulf of Mexico.

A storm could disrupt offshore natural-gas production in the Gulf of Mexico, reducing supplies and raising prices.