Natural Gas Storage Build Misses Estimates, Boosting Prices

Key Insights

• Working gas in storage increased by 86 Bcf from the previous week. 
• Australian unions may resume strikes at Chevron’s LNG facilities. 
• Natural gas price settled above the $3.00 level and is moving higher. 

On October 5, EIA released Weekly Natural Gas Storage Report, which indicated that working gas in storage increased by 86 Bcf from the previous week. Analysts expected that working gas in storage would grow by 92 Bcf, so the report missed analyst estimates.

At current levels, stocks are 357 Bcf higher than last year and 172 Bcf above the five-year average of 3,273 Bcf.

Natural gas continued to trade above the psychologically important $3.00 level as traders reacted to the EIA report. From the technical point of view, a successful test of the resistance at $3.00 – $3.05 will push natural gas towards the next resistance level, which is located in the $3.60 – $3.75 range. There are no important levels between $3.05 and $3.60, so natural gas has a good chance to gain upside momentum.

In addition to the EIA report, traders will also focus on the recent developments in Australia. Chevron is trying to negotiate a deal to end strikes at its LNG plants.

Workers called off strikes more than one week ago, but recent reports indicate that negotiators have failed to reach consensus, and strikes could be resumed.

The current demand for natural gas remains low, and weather forecasts stay uninspiring. At the same time, it should be noted that average gas output in the lower 48 U.S. states has dipped slightly in October, which could provide more support to natural gas prices.

For a look at all of today’s economic events, check out our economic calendar.