On December 27, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage declined by -93 Bcf from the previous week, compared to analyst consensus of -99 Bcf. In the previous week, working gas in storage decreased by -125 Bcf.
At current levels, stocks are 14 Bcf higher than last year and 166 Bcf above the five-year average for this time of the year. High storage levels have served as the key bearish catalyst for natural gas markets in 2024, but traders have started to focus on other catalysts in recent months.
Natural gas moved away from session highs as traders reacted to the report. The storage draw missed analyst expectations, which is bearish for natural gas markets.
Traders will also stay focused on weather forecasts. The recent changes in forecasts for the beginning of January pointed to colder weather, which may provide additional support to natural gas markets.
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See all Natural Gas forecastsThe situation in Europe may also impact the dynamics of U.S. natural gas markets. Russia is expected to stop the transit of natural gas to EU through Ukraine, which will likely increase demand for U.S. LNG in the first half of the next year.
From the technical point of view, natural gas is trying to settle above the $3.40 level. In case this attempt is successful, natural gas will move towards the nearest resistance level at $3.55 – $3.60.
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