EIA Natural Gas Storage Draw Of -190 Bcf Exceeds Analyst Estimates

On December 12, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage declined by -190 Bcf from the previous week, compared to analyst forecast of -170 Bcf. In the previous week, working gas in storage decreased by -30 Bcf.

At current levels, stocks are 67 Bcf higher than last year and 165 Bcf above the five-year average for this time of the year.

The price of natural gas moved higher as traders reacted to the report. Demand for natural gas exceeded expectations, and working gas in storage decreased by -190 Bcf. Falling storage levels are bullish for natural gas markets.

Cold weather served as the key catalyst that boosted demand for natural gas, so traders will stay focused on weather forecasts. The current demand for natural gas is high while near-term weather forecasts are favorable for the bulls, which may provide additional support to natural gas markets.

From the technical point of view, natural gas settled above the previous resistance at $3.20 – $3.25 and is trying to settle above the $3.40 level. In case this attempt is successful, natural gas will gain additional upside momentum and move towards the next resistance at $3.55 – $3.60. RSI remains in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.

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