EIA Natural Gas Storage Build Of +80 Bcf Exceeds Analyst Estimates

On October 24, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by +80 Bcf from the previous week, compared to analyst consensus of +61 Bcf. In the previous week, working gas in storage increased by +76 Bcf.

At current levels, stocks are 106 Bcf higher than last year and 167 Bcf above the five-year average for this time of the year.  High storage levels continue to serve as the key bearish catalyst for natural gas markets.

Natural gas prices moved lower as traders reacted to the EIA report. Natural gas storage build has significantly exceeded analyst expectations, so traders rushed to take profits off the table after the rebound from recent lows.

The weather forecasts remain bearish, and traders expect that demand for natural gas will stay low this week.

From the technical point of view, natural gas has recently made an attempt to settle above the resistance at $2.40 – $2.45. However, the bearish report put material pressure on natural gas prices, so it remains to be seen whether natural gas will be able to settle above the $2.45 level in the near term. On the support side, a move below the $2.35 level will push natural gas towards the nearest support at $2.20 – $2.25. Traders will soon switch to the next month contract, so volatility may increase.

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