Natural Gas News: Prices Hold Steady as Traders Eye EIA Storage Report

U.S. Natural Gas Market Steadies Ahead of EIA Storage Report

U.S. natural gas prices traded flat on Thursday as market participants awaited the release of the weekly Energy Information Administration (EIA) storage report. The report, scheduled for 14:30 GMT, is expected to provide insight into the current supply levels, crucial for guiding near-term price direction. Early in the session, prices reached a three-month high but have since receded. The market remains in a wait-and-see mode as traders assess upcoming data.

At 13:00 GMT, Natural Gas futures are trading $2.815, down $0.002 or -0.07%.

Technical Resistance at Key Levels

From a technical standpoint, natural gas futures face significant resistance at the $2.937 level, which marks the 50% retracement of a longer-term move. This is closely followed by the 200-day moving average at $2.972. Should prices approach this zone, traders expect short-sellers to emerge, particularly on the initial test of these resistance levels. However, if prices manage to break above the 200-day moving average, it could signal further upside potential, possibly triggering a breakout rally.

On the downside, support is firmly in place at the 50-day moving average, currently at $2.482. This level may serve as a cushion against any immediate downside pressure, especially if the EIA report surprises to the downside with a larger-than-expected inventory build.

Impact of Hurricane Helene on Production and Demand

Hurricane Helene is adding complexity to the market, as it approaches the Florida Gulf Coast. The storm has already led to offshore rig shutdowns, curbing supply from the Gulf of Mexico. However, the demand side is also being affected, with cooler temperatures and widespread power outages anticipated to counterbalance the production losses. Power outages are expected to affect over 1 million customers, which could dampen short-term natural gas demand in the impacted regions.

Weather conditions are generally mild across much of the U.S., with low to very low demand expected over the next seven days, according to NatGasWeather. This reduced demand outlook, combined with the storm’s impact, suggests a neutral to bearish short-term influence on natural gas prices.

EIA Storage Report Anticipation

Market consensus is looking for a build of 52 Bcf in the EIA’s weekly storage report, nearly matching last week’s 58 Bcf build. Current working gas in storage stands at 3,445 Bcf, which is 194 Bcf higher than the same period last year and 274 Bcf above the five-year average. A report showing a larger-than-expected build could weigh on prices, while a significant miss on the downside may trigger a short-covering rally.

The storage levels are within the five-year historical range, suggesting that there is no immediate concern about supply shortages. However, if the storage report deviates significantly from expectations, it could create volatility in the market.

Market Forecast

In the short term, natural gas prices are likely to remain range-bound between the key support and resistance levels. The upcoming EIA report will be a critical catalyst, with any surprise potentially sparking a directional move. Given the mixed fundamentals, including hurricane-related production impacts and low demand forecasts, the market leans slightly bearish unless a bullish surprise from the EIA data or weather-driven demand emerges.