Natural Gas Storage Build Exceeds Estimates
- Working gas in storage grew by 57 Bcf, compared to analyst consensus of +48 Bcf.
- The potential intensification of strike action in Australian LNG projects provided some support to the market, but prices have started to move lower after the release of the EIA report.
- The recent changes in weather forecasts, which indicate that demand may be low in the upcoming days, may put additional pressure on natural gas prices.
On September 14, EIA released its Weekly Natural Gas Storage Report, which indicated that working gas in storage increased by 57 Bcf from the previous week.
Analysts expected that working gas in storage would grow by 48 Bcf, so the report exceeded expectations.
At current levels, stocks are 445 Bcf higher than last year at this time and 203 Bcf above the five-year average of 3002 Bcf.
The current demand for natural gas is low, and the recent changes in weather forecasts were bearish. However, natural gas made an attempt to gain upside momentum today as traders focused on the strike action at Chevron’s LNG projects in Australia, which could have a material impact on global LNG markets.
While traders’ mood has been rather bullish, the disappointing EIA report may put material pressure on natural gas prices, which have already moved lower after the release of the report.
Stocks are building faster than expected while demand is projected to be low in the second half of the month, so it remains to be seen whether natural gas will find enough catalysts to push natural gas prices above the strong resistance in the $2.80 – $2.85 range.
For a look at all of today’s economic events, check out our economic calendar.