EIA Storage Data Meets Analyst Estimates

Key Insights

• Working gas in storage increased by 35 Bcf from the previous week. 
• Traders also focus on the developments in the potential LNG strike in Australia. 
• Natural gas price did not show a strong reaction to the report as it met analyst estimates.

On August 17, EIA released the Weekly Natural Gas Storage report. The report indicated that working gas in storage increased by 35 Bcf from the previous week.

Analysts expected that working gas in storage would grow by 34 Bcf, so the report was mostly in line with analyst estimates.

At current levels, stocks are 549 Bcf higher than last year at this time and 299 Bcf above the five-year average of 2,766 Bcf.

The current demand for natural gas remains high. Hot weather is expected for August 20 – August 25 but the end of the month may be cooler, which is somewhat bearish for natural gas prices.

Natural gas prices did not show a strong reaction to the EIA report, which is not surprising as the report has mostly met analyst estimates. From the technical point of view, natural gas is trying to rebound after the recent sell-off, which was triggered by the bearish changes in weather forecasts.

The developments in global LNG markets may provide psychological support to U.S. natural gas markets as traders focus on the risks related to Australia LNG exports, which could be impacted by the potential strike shutdowns.

The price of natural gas remains near the important $2.65 level after the release of the EIA data. In case natural gas manages to settle above $2.65, it will have a good chance to gain additional upside momentum and move towards the resistance in the $2.80 – $2.85 area.

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