EIA Natural Gas Storage Draw Of -125 Bcf Is Mostly In Line With Analyst Expectations

On December 19, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage declined by -125 Bcf from the previous week, compared to analyst forecast of -126 Bcf. In the previous week, working gas in storage decreased by -190 Bcf.

At current levels, stocks are 20 Bcf higher than last year and 132 Bcf above the five-year average for this time of the year.

The price of natural gas moved higher as traders reacted to the EIA report, which has mostly met analyst expectations. It looks that traders were worried that the report would show that demand for natural gas was weaker than previously expected.

Traders will also stay focused on weather forecasts. The current demand for natural gas is low, but forecasts indicate that colder weather may boost demand in early January.

Geopolitical tensions may also provide support to natural gas markets. Apparently, Russia will not transit its gas through Ukraine to Europe in 2025, so demand for U.S. LNG may increase.

From the technical point of view, natural gas is moving towards the nearest resistance level at $3.55 – $3.60 level. A move above the $3.60 level will open the way to the test of the next resistance at $3.80 – $3.85.

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