Naturalgas on MCX settled up 1.83% at 199.80 rose back toward 200 level tracking gain's from Nymex Gas prices while rallied on Monday, holding near a recent 20-month high, with strong demand and hopes for even more on the way encouraging traders to bet on rising prices. Historic heat has caused record demand for gas-fired power at a time of declining supply growth, persuading many to bet that the glut will ease and lift prices just ahead of the high-demand winter-heating season. That could cause prices to keep shooting higher if winter produces strong demand. Nearly the entire eastern half of the country is likely to get temperatures averaging 2 to 3-degrees-Fahrenheit-below normal in November, it said. Extreme cold is likely to linger in some parts of the North through March, pushing the need for heat up 8.2% over the 10-year average, by the metric of heating-degree days. Industrial demand also has increased from a year ago for six straight months, according to the US EIA. It peaked in August at 19.85bcf a day, up 3.1% from a year ago. Futures also have been getting a boost recently from the spot market. It keeps trading at higher prices than futures, rare at this time of year, because of increasing exports and field maintenance near the Henry Hub benchmark. Meanwhile a weather system tracking out of the west-central US and across the Midwest and Mid-Atlantic the next several days will bring showers and slight cooling with highs of upper 50s to lower 70s. Overall, nat gas demand will be LOW to MODERATE. Technically market is under short covering and getting support at 197.3 and below same could see a test of 194.8 level, And resistance is now likely to be seen at 201.6, a move above could see prices testing 203.4.

Trading Ideas:

Naturalgas trading range for the day is 194.8-203.4.

Natural gas prices rose back toward 200 mark with strong demand and hopes

Historic heat has caused record demand for gas-fired power at a time of declining supply growth

Commodity Weather Group LLC updated a cold winter outlook with even colder temperatures.