EIA Natural Gas Storage Build Of +35 Bcf Exceeds Estimates

On August 22, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by 35 Bcf from the previous week, compared to analyst consensus of +27 Bcf.

At current levels, stocks are 221 Bcf higher than last year and 369 Bcf above the five-year average for this time of the year. High storage levels continue to serve as one of the key bearish catalysts for natural gas prices.

Natural gas  tested session lows as traders reacted to the bearish EIA report. The actual numbers exceeded most forecasts, so it’s not surprising to see that traders rushed to sell natural gas futures after the release of the EIA data.

The current demand for natural gas is moderate, but weather forecasts indicate that it would increase over the weekend. It remains to be seen whether it would provide any support to natural gas markets.

From the technical point of view, natural gas pulled back towards the important support level at $2.00 – $2.05. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in the near term. If natural gas declines below the $2.00 level, it will move towards the next support level, which is located in the $1.80 – $1.85 range.

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