Natural Gas Price Prediction – Natural Gas Storage Build Exceeds Expectations
- Natural gas price fell towards $6.30 after the release of the EIA report.
- Working gas in storage increased by 74 Bcf, exceeding analyst expectations.
- The continuation of the current sell-off will push the natural gas price to the $6.00 level.
Problems At Freeport LNG Remain The Key Driver For Natural Gas Markets
Natural gas prices found themselves under pressure after the release of the EIA Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by 74 Bcf to 2,169 Bcf. At current levels, stocks are 331Bcf below the five-year average of 2,500 Bcf.
The report highlights the impact of the recent explosion at Freeport LNG. The natural gas that cannot be exported stays in the domestic markets, leading to an additional increase in storage levels.
Importantly, the increase of 74 Bcf exceeded the analyst consensus, which called for an increase of 65 Bcf, serving as an additional bearish catalyst for natural gas markets.
Stocks will continue to increase in the upcoming weeks. It will take up to 3 months to get Freeport LNG back to work, which can put push natural gas prices to lower levels.
Natural Gas Price Stays Under Pressure
Natural gas has recently managed to settle below the support at $6.55 and is testing the next support level at $6.35.
In case natural gas manages to settle below this level, it will head towards the next support, which is located at $6.00. A move below the support at $6.00 will open the way to the test of the support at $5.85.
On the upside, the previous support level at $6.55 will serve as the first resistance level for natural gas. A successful test of this level will push natural gas towards the resistance at $6.80. If natural gas climbs above this level, it will head towards the resistance at $7.00.
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