Natural Gas Storage Draw Exceeds Estimates

On February 29, 2024, EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage declined by 96 Bcf from the previous week, compared to analyst consensus of -88 Bcf.

At current levels, stocks are 248 Bcf higher than last year and 498 Bcf above the five-year average of 1,876 Bcf.

Natural gas prices  have recently started to move higher as traders bet that the market has bottomed out. Production cuts provided additional support to the market.

The current demand for natural gas is moderate, but weather forecasts indicate that it would decline due to warmer temperatures at the beginning of March.

The price of natural gas moved higher after the release of the EIA report as storage draw exceeded analyst estimates. However, stocks remain well above the five-year average for this time of the year, so it remains to be seen whether natural gas will gain sustainable upside momentum in the near term.

From the technical point of view, natural gas received strong support near $1.60 – $1.65 and is moving towards the key resistance at $1.95 – $2.00. A move above the $2.00 level will indicate that natural gas markets are ready for a stronger move.

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