Natural Gas Storage Draw Misses Analyst Expectations

On April 4, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage decreased by 37 Bcf from the previous week, compared to analyst consensus of -38 Bcf.

It should be noted that some analysts believed that storage draw would exceed 40 Bcf, so the report has missed analyst expectations.

At current levels, stocks are 422 Bcf higher than last year at this time and 633 Bcf above the five-year average of 1,626 Bcf. Stocks remain well above the five-year average due to warm weather in winter.

Natural gas moved lower as traders reacted to the report. The absence of strong upside catalysts remains a key problem for natural gas bulls.

From a big picture point of view, it is clear that previous production cuts did not provide sufficient support to natural gas prices. Natural gas is heading towards the key support level, which is located in the $1.60 – $1.65 range.

Bulls will have to wait until the next EIA report and hope that it will provide the market with upside catalysts. Meanwhile, natural gas markets may remain under material pressure due to modest demand and ample supply.

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