Natural Gas Price Fundamental Daily Forecast – EIA Reports Smaller-Than-Expected 114 Bcf Withdrawal

Natural gas futures are trading higher at the mid-session on Thursday following the release of the government’s weekly storage report at 15:30 GMT. The market was up before the report and has inched lower since its release. Additionally, the high and low of the session are the same as before the report. This suggests that we are seeing a limited reaction to the weekly data with most traders keyed in on the weather forecasts.

At 16:31 GMT, February Natural Gas futures are trading $2.461, up $0.039 or +1.61%.

US Energy Information Administration Weekly Storage Report

Today’s EIA weekly storage report surprised to the downside for the second week in a row. The government report showed a much smaller-than-expected 114 Bcf withdrawal from stocks for the week-ending December 25.

Ahead of the report, Natural Gas Intelligence (NGI) wrote, a Bloomberg survey of nine analysts showed an unusually wide range of withdrawal estimates from as low as 88 Bcf to as large as 150 Bcf, with a median of 126 Bcf.

A Wall Street Journal poll showed estimates within that same range, with an average of 129 Bcf. A Reuters poll of 16 market participants showed withdrawals as low as 85 Bcf, but the median was near those of other surveys, at 125 Bcf. NGI pegged the pull at 124 Bcf.

Last year, the EIA recorded an 87 Bcf draw for the similar week, while the five-year average is a 102 Bcf draw.

Total working gas in storage fell to 3,460 Bcf, which is still 251 Bcf above year-ago levels and 206 Bcf above the five-year average.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through $2.263 will signal a resumption of the downtrend. The main trend will change to up on a move through $2.775.

The short-term range is $2.775 to $2.263. Its 50% to 61.8% retracement zone at $2.519 to $2.579 stopped the buying on Thursday at $2.519.

The minor range is $2.263 to $2.522. Its retracement zone at $2.393 to $2.362 is the next potential target area.

Aggressive counter-trend buyers could come in on a test of $2.393 to $2.362. They are going to try to form a potentially bullish secondary higher bottom. If $2.362 fails to hold then look for a retest of $2.263.

Additionally, look for a downside bias under $2.519 and for an upside bias to develop on a sustained move over $2.579.

For a look at all of today’s economic events, check out our economic calendar.