Naturalgas on MCX settled down -1.23% at 209.20 while earlier in the day prices edged higher but trader booked there long position despite government data indicated that natural gas supplies are tight even though mild temperatures have limited demand for the fuel. The US EIA reported that stockpiles shrank by 152bcf of gas last week. But that number also included what was an essentially an accounting change. The EIA reclassified 5bcf of natural gas as “base gas”--gas needed to make storage facilities operational. That compared with a withdrawal of 87bcf in the preceding week, 70 billion a year earlier and a five-year average drop of 138bcf. Total natural gas in storage currently stands at 2.559 trillion cubic feet, according to the US EIA , 11.3% lower than levels at this time a year ago and 1.8% above the five-year average for this time of year. Prices of the heating fuel are down around 17% so far this year as forecasts for warm winter weather weighed on heating demand expectations. Natural gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns. It still appears as though natural gas prices are merely reacting to the oversold condition which developed as a result of the sell-off at the end of last week. A reaction to the oversold condition, which resulted from last week’s decline and pushed the contract down 10% for the week overall, should not be enough to result in a sustainable move above the next level of resistance. Technically market is getting support at 207 and below same could see a test of
204.8 level, And resistance is now likely to be seen at 212.4, a move above could see prices testing 215.6.

Trading Ideas:

# Naturalgas trading range for the day is 204.8-215.6.

# Natural gas struggled to hold its gain despite data showed that natural gas supplies in storage in the U. S. fell.

# EIA said in its weekly report that natural gas storage in the U. S. declined by 152bcf in the week ended February 3

# Natural gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns.