Natural gas futures are trading lower Tuesday and rapidly approaching its November low as investors feel that the next wave of cold pressure won’t create enough demand to drive down current storage levels at a fast enough pace.
At 1320 GMT, January Natural Gas is trading $2.925, down $0.060 or -2.01%.
The price action clearly shows sellers are trying to drive prices through the November 24 main bottom at $2.903. On the upside, the nearest resistance is retracement zone at $3.023 to $3.061.
Updated National Weather Service projections for the six-to-10-day and eight- to 14-day periods continue to show the US split between below-average temperatures over the entire eastern half and above-average temperatures over the bulk of the West, with a narrow swath of average temperatures over the Central US.
Cold weather in store for the major heat-consuming regions in the East should boost demand and weekly stock withdrawals, but recent mild conditions have meant modest storage withdrawals.
In other news, according to the U.S. Energy Information Administration, natural gas storage in the U.S. fell by 33 billion cubic feet (bcf) in the week-ended November 24, compared to forecasts for a withdrawal of 37 bcf.
That compared with a drop of 46 bcf in the preceding week, a fall of 50 bcf a year earlier and a five-year average decline of 47 bcf.
Total natural gas in storage currently stands at 3.693 trillion cubic feet (tcf), according to the EIA. That figure is 309 bcf, or around 7.7%, lower than levels at this time a year ago and 107 bcf, or roughly 2.8%, below the five-year average for this time of year.