EIA Natural Gas Storage Build Of +65 Bcf Exceeds Analyst Expectations

On July 11, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by 65 Bcf from the previous week, compared to analyst consensus of +56 Bcf.

At current levels, stocks are 283 Bcf higher than last year and 504 Bcf above the five-year average of 2,695.

Weather forecasts indicate that demand for natural gas will stay strong in the next seven days. However, hot weather does not provide support to prices due to rising production and problems at Freeport LNG terminal, which remains shut after Hurricane Beryl’s landfall.

Not surprisingly, natural gas prices remained under pressure after the release of the EIA report. High inventory levels have put significant pressure on natural gas prices in recent weeks.

Unfortunately for the bulls, hot weather does not provide sufficient support to the market as inventories are rising faster than analysts expect.

High production levels and problems with Freeport LNG terminal serve as negative catalysts for natural gas markets.

At this point, natural gas needs significant positive catalysts to break the bearish trend. It remains to be seen whether such catalysts would emerge in the near term.

Currently, natural gas is trying to settle below the support level at $2.25 – $2.30. In case this attempt is successful, natural gas will move towards the next support, which is located in the $2.00 – $2.05 range.

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