Natural Gas News: Record 270 Bcf Draw Expected Today – Will Storage Report Ignite Bulls?

Will Technical Barriers Break Under Arctic Pressure?

Natural gas futures trend higher before the EIA storage report release, with February Nymex contract hovering near $4.00/MMBtu. The market cleared a pivot at $3.850, reducing selling pressure. The next resistance stands at $4.053, which could trigger an advance toward the short-term peak of $4.369.

At 14:42 GMT, Natural Gas futures are trading $4.004, up $0.044 or +1.11%.

Record Storage Draw: Game Changer or Buffer Zone?

Analysts project a substantial 270 Bcf withdrawal in today’s EIA report, following last week’s significant 258 Bcf draw that doubled the five-year average. Despite aggressive withdrawals, inventories maintain a 77 Bcf surplus above the five-year average, acting as a price stabilizer.

Deep Freeze Grips Markets: How Long Will It Last?

Arctic conditions persist across the interior U.S. with temperatures ranging from -10s to 20s, while Texas and the South experience lows between 10s and 30s. This severe weather pattern supports robust heating demand through Friday. A weekend moderation is expected, with temperatures rising to 40s-60s in southern and eastern regions.

Production Freeze-offs vs LNG Flows: Who Wins?

Regional freeze-offs in Texas and the South constrain production, while European LNG demand provides additional support. However, seasonal reductions in power generation and variable LNG flows counterbalance these bullish elements. Trading activity remains cautious ahead of the EIA report scheduled for 15:30 GMT.

Market Forecast: Breaking Point or Double Top?

The combination of technical resistance at $4.053 and fundamentals create a critical price point. The projected storage drawdown could provide momentum for a push through this level toward $4.369. However, approaching warmer temperatures and the existing storage surplus may cap upside potential. A break below $3.850 could accelerate selling toward $3.711, particularly if the EIA report falls short of expectations.

More Information in our Economic Calendar.