Natural Gas Pulls Back After EIA Report

Key Insights

• Working gas in storage grew by 49 Bcf. 
• The previous report was revised from +72 Bcf to +76 Bcf. 
• Natural gas futures moved below the $2.60 level after the release of the report. 

On July 13, EIA released its Weekly Natural Gas Storage report. The report indicated that working gas in storage increased by 49 Bcf from the previous week, compared to analyst consensus of +51 Bcf.

The build was smaller than the five-year average of +55 Bcf. It should be noted that analyst forecasts ranged between +49 Bcf and +52 Bcf, so the report has mostly met analyst estimates.

At current levels, stocks are 364 Bcf above the five-year average for this time of the year. EIA also reported that the previous report was revised from +72 Bcf to +76 Bcf.

The current demand for natural gas stays high. At the same time, the recent trends in weather forecasts suggest colder weather, which is bearish for natural gas markets.

Natural gas futures declined below the $2.60 level after the release of the report. While the report has mostly met analyst estimates, the revision of the previous report served as a negative catalyst for natural gas markets.

Cooler weather trends may serve as an additional bearish factor for natural gas. Traders should also note that maintenance work limits LNG demand, which is an important catalyst in play.

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