U.S. Natural Gas Prices Edge Lower Amid Pre-EIA Report Pressure
U.S. natural gas futures are trading lower Thursday, retreating after briefly crossing the 200-day moving average of $3.376. This move, which failed to breach the key pivot level at $3.444, signals traders are taking profits and selling into rallies ahead of the Energy Information Administration (EIA) weekly storage report.
At 13:19 GMT, Natural Gas Futures are trading $3.305, down $0.073 or -2.16%.
Resistance Levels and Downside Risks
Current resistance remains at $3.376 and $3.444, with a potential breakout above these levels targeting $3.637 to $3.647, marking prior highs. On the downside, sustained selling pressure below the 200-day moving average could prompt a retest of the 50% retracement level at $3.118 and the 50-day moving average at $3.099. A failure to hold the 50-day MA would shift momentum decisively bearish.
EIA Storage Report: A Key Focus
The market is closely monitoring the EIA’s weekly storage report, where consensus expects a withdrawal of -165 Bcf, with some estimates pointing as high as -173 Bcf. The sample period saw colder-than-normal conditions over the eastern two-thirds of the U.S., while the West experienced warmer weather. The projected draw will improve storage surpluses by roughly 100 Bcf.
As of November 29, 2024, working gas in storage stood at 3,937 Bcf, reflecting a net decrease of 30 Bcf from the previous week. Inventories are 185 Bcf higher than this time last year and 284 Bcf above the five-year average of 3,653 Bcf.
Weather Outlook Supports Mixed Demand
NatGasWeather forecasts indicate a frosty system impacting the Midwest, Ohio Valley, and East through Saturday, with temperatures dropping to lows of -10s to 20s. Northern Texas, the South, and Southeast are also expected to experience lows in the 20s-30s for the next few nights. Meanwhile, the western and southern U.S. will see milder conditions with highs in the 40s-70s, spreading to the central and eastern U.S. by early next week.
Natural Gas Price Forecast
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Natural gas prices remain in a precarious position, with further downside likely if key support levels fail. However, a larger-than-expected storage draw or colder weather forecasts could reignite bullish momentum, potentially driving prices toward recent highs. Until then, the market appears poised to consolidate under key technical thresholds.
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