Key Insights
- Working gas in storage decreased by 140 Bcf from the previous week.
- Inventory draw exceeded analyst expectations, which may provide some support to natural gas prices.
- Weather forecasts’ dynamics will remain the key catalyst for natural gas markets.
On January 11, 2024, EIA released its Weekly Natural Gas Storage report. The report indicated that working gas in storage declined by 140 Bcf from the previous week, compared to analyst consensus of -119 Bcf.
At current levels, stocks are 436 Bcf higher than last year and 348 Bcf above the five-year average of 2,988.
The larger-than-expected draw may provide additional support to natural gas prices, which are trying to rebound after yesterday’s pullback.
Traders will also stay focused on the changes in weather forecasts. Current forecasts imply cold weather until January 21, but warmer temperatures may return closer to the end of the month.
Taking a look at the futures curve, March contract settled near the $2.60 level, $0.5 below the front-month February contract. This is a rather dangerous situation for the bulls as it shows that the continuation of the current rally will depend on near-term catalysts.
From the technical point of view, natural gas is trying to settle above the $3.10 level after the release of the bullish EIA report. It remains to be seen whether natural gas will be able to gain additional upside momentum as traders will also monitor weather forecasts.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
