EIA Natural Gas Storage Build Of +18 Bcf Misses Analyst Expectations

On August 1, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by 18 Bcf from the previous week, compared to analyst consensus of +31 Bcf.

At current levels, stocks are 252 Bcf higher than last year and 441 Bcf above the five-year average for this time of the year.

Natural gas  moved higher as traders reacted to the report. The inventory build missed analyst estimates despite high production levels, which continue to serve as the key bearish catalyst for natural gas markets.

The current demand for natural gas is strong due to hot weather. Forecasts indicate that demand should stay strong in the next seven days, which may provide additional support to natural gas markets.

From the fundamental point of view, the market remains oversupplied. The weather did not provide sufficient support to natural gas markets in the first two months of summer, and it remains to be seen whether supply/demand balance would improve in August.

From the technical point of view, natural gas received strong support in the $2.00 – $2.05 range. However, the recent attempts to rebound were mostly driven by short-covering. Natural gas needs real buyers to have a chance to gain sustainable upside momentum, but such buyers may prefer to see additional bullish catalysts before betting on a rebound.

For a look at all of today’s economic events, check out our economic calendar.