Natural Gas News: Traders Brace for Minimal Storage Changes in EIA Report

Futures Fall Amid Technical Weakness

U.S. natural gas futures traded lower on Wednesday as traders positioned ahead of the weekly storage report from the U.S. Energy Information Administration (EIA). While some speculate that weather changes may have contributed to the decline, the sell-off appears more technically driven.

Prices failed to hold above resistance at $3.444 early in the session, accelerating downward after crossing the 200-day moving average at $3.400. If bearish momentum continues, key support levels include the 50-day moving average at $3.145 and a short-term support zone between $3.118 and $2.993.

Storage Projections Keep Buyers on Sidelines

The market remains cautious ahead of the EIA’s storage report, due at 17:00 GMT. Analysts anticipate a minimal storage change, with projections ranging from a 1 Bcf build to a 1 Bcf draw, a figure well below the five-year average withdrawal of 30 Bcf.

The subdued expectations stem from last week’s warmer-than-normal temperatures across much of the eastern U.S., countering cooler conditions in the West. Early estimates suggest a potential draw of 7-8 Bcf due to increased heating degree days, though higher wind energy generation could reduce demand.

Mixed Weather Patterns Complicate Forecasts

NatGasWeather reports moderate natural gas demand today, rising to high demand later in the week. A cold system lingers over the Midwest, with temperatures in the 10s to 30s, while the West and New England see milder conditions. High pressure dominates much of the South and East, where temperatures range from the mid-50s to 80s. By Thursday, colder air is expected to spread eastward, potentially driving stronger heating demand into early December.

Market Forecast

Uncertainty regarding storage data and mixed weather signals are creating volatility in natural gas futures. A smaller-than-expected storage change could weigh further on prices, while stronger heating demand from advancing cold air may provide a supportive floor.

Short-term outlook: Neutral to Bearish, with potential for stabilization if colder weather bolsters demand.

More Information in our Economic Calendar.