Natural Gas, WTI Oil, Brent Oil Forecasts – EIA Natural Gas Storage Build Of +70 Bcf Misses Estimates

On May 16, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by 70 Bcf from the previous week, compared to analyst consensus of +76 Bcf.

At current levels, stocks are 421 Bcf higher than last year at this time and 620 Bcf above the five-year average.

Natural gas prices gained ground after the release of the EIA report. The storage build fell short of analyst expectations, which may serve as an additional bullish catalyst for the market. Natural gas prices have been moving higher since early May.

The significant oversupply remains an important catalyst for natural gas, as storage levels exceed last year’s levels and the five-year average for this time of the year.

However, traders bet that rising LNG exports, the previously announced production cuts, and the potentially hot summer would boost demand for natural gas, pushing the prices towards new highs.

From the technical point of view, natural gas is trying to settle above the resistance at $2.45 – $2.50. In case this attempt is successful, natural gas will head towards the next resistance level, which is located in the $2.80 – $2.85 range. RSI remains in the moderate territory, so there is enough room to gain momentum in the near term.

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