Natural Gas Storage Build Exceeds Analyst Estimates

On April 11, 2024, EIA released its Weekly Natural Gas Storage report. The report indicated that working gas in storage increased by 24 Bcf from the previous week.

Analysts expected that working gas in storage would increase by 14 Bcf, so the report exceeded expectations.

At current levels, stocks are 435 Bcf higher than last year and 633 Bcf above the five-year average of 1,650 Bcf.

Weak demand remains the key problem for natural gas markets. At this point, production cuts did not bring significant changes to supply/demand balance.

The current demand for natural gas stays low. Weather forecasts are uninspiring, and demand is expected to remain low in the upcoming days.

Natural gas prices moved lower after the release of the EIA report, which showed that storage build exceeded analyst estimates.

There are no signs indicating that supply/demand balance has improved in recent weeks. The absence of positive catalysts is the key problem for natural gas bulls in the current market environment.

From the technical point of view, natural gas remains stuck between the key support at $1.60 – $1.65 and the major resistance at $1.95 – $2.00.  Natural gas has recently made an attempt to get to the test of the $2.00 level, but the disappointing EIA report may push prices towards the recent lows near $1.70.

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