Natural Gas News: EIA Report Looms Today as Futures Test Key Support Levels

Natural Gas Futures Edge Lower Ahead of EIA Storage Report

U.S. natural gas futures are trending lower on Thursday morning, with traders cautious ahead of the weekly storage report from the Energy Information Administration (EIA) due at 14:30 GMT. \

The market’s recent struggle to surpass the resistance levels between $2.301 and $2.315 has shifted the focus towards the pivot price support at $2.091. This marks the second test of this support level within the week, raising questions about whether buyers will step in to halt the price decline or if sellers will push the market lower towards major support at $1.907 to $1.882.

At 13:24 GMT, Natural Gas Futures are trading $2.104, down $0.073 or -3.35%.

Market Uncertainty Due to Weather and Inventory Data

Thursday’s dip in futures comes amid mixed weather patterns and the impending EIA report, which adds uncertainty to the market. Analysts anticipate a storage build, with survey estimates ranging from +25 to +32 Bcf, but the majority expect a +26 Bcf increase.

According to NatGasWeather, the recent weather was warmer than usual in the western and southern U.S., while cooler conditions prevailed in the Plains, Midwest, and East. The build could lean bearish, potentially around +34-35 Bcf, due to a significant drop in cooling degree days (CDDs) and stronger wind and solar power generation. The anticipated report keeps traders on edge, with potential impacts on near-term prices.

Wednesday Recap: Futures Retreat Amid Shifting Fundamentals

On Wednesday, September Nymex natural gas futures experienced a reversal from early gains, closing in negative territory as market sentiment shifted. The lingering heat in certain regions was overshadowed by expectations of cooler weather moving into the fall shoulder season. This led to a retreat in spot prices, reflecting the market’s focus on the weakening demand outlook as summer winds down.

Weather Outlook: Moderate to High Demand Expected

Looking ahead, the weather forecast shows continued heat across much of the western, central, and southern U.S., with temperatures ranging from the upper 80s to 100s, suggesting strong demand in these areas. In contrast, lighter demand is expected in the Great Lakes, Ohio Valley, Northeast, and Mid-Atlantic through Friday, with highs in the 60s to 80s. However, the southern U.S. is set to see hotter conditions this weekend, potentially driving national demand from moderate to high or very high levels.

Market Forecast: Bearish Outlook with Risks of Further Decline

Given the current resistance levels and the upcoming EIA storage report, the natural gas market appears vulnerable to further declines. If the storage build exceeds expectations, coupled with weaker seasonal demand and strong renewable energy generation, prices could break through the $2.091 support and test the major support at $1.907 to $1.882. Traders should prepare for a potentially bearish market in the near term.