Surpassing Predictions: Natural Gas Storage Withdrawal Exceeds Expectations

Highlights

• The amount of natural gas held in storage decreased by 96 billion cubic feet compared to the week before.
• Current stocks exceed the five-year average for this time of the year by 498 billion cubic feet.
• The price of natural gas is approaching the significant resistance level of $1.95 - $2.00.  

On February 29, 2024, the EIA published its Weekly Natural Gas Storage Report, revealing a 96 Bcf reduction in working gas in storage compared to the prior week, differing from the analyst consensus of -88 Bcf.

Currently, stocks exceed last year's levels by 248 Bcf and are 498 Bcf higher than the five-year average of 1,876 Bcf.

Recent increases in natural gas prices reflect trader speculation that the market has reached its lowest point, supported further by production cuts.

Although the current demand for natural gas is moderate, upcoming weather forecasts predict a decline in demand due to warmer temperatures in early March.

Following the release of the EIA report, natural gas prices rose as the storage draw surpassed analyst expectations. However, stocks remain significantly above the five-year average for this time of year, leaving uncertainty regarding sustainable upward momentum for natural gas in the near future.

Technically, natural gas found strong support around the $1.60 – $1.65 range and is trending towards the critical resistance at $1.95 – $2.00. Surpassing the $2.00 mark would signal that the natural gas markets are poised for a more significant upturn.