EIA Natural Gas Storage Build Of +58 Bcf Exceeds Estimates
The natural gas market continues to face downward pressure as prices struggle to recover from session lows. According to the latest Energy Information Administration (EIA) report, the storage build exceeded expectations, leading to further market volatility. Despite this, traders are watching closely to see if this data will drive additional bearish momentum.
In recent sessions, natural gas prices have been falling, attributed to several factors. First, weather forecasts have remained mild, reducing demand. The western and northern U.S. regions are experiencing moderate temperatures, which are expected to keep national demand for natural gas low in the coming days. Additionally, higher wind energy generation has also contributed to decreased natural gas usage, impacting overall demand.
From a technical perspective, natural gas prices are flirting with key support levels between $2.25 and $2.30. If prices break below these levels, further downside momentum could drive them towards the next support range, located between $2.00 and $2.05. Despite this potential drop, traders are cautious, as the current market volatility could lead to unexpected shifts.
While the market remains bearish in the short term, the EIA report suggests some potential for a short-term rally if demand picks up or the storage build proves smaller than anticipated. However, with mild weather patterns dominating most of the U.S., natural gas consumption is likely to remain subdued, keeping prices under pressure for now.
