Surprising Spike: EIA Natural Gas Storage Build Exceeds Analyst Estimates
Published on March 27, 2025, the EIA Weekly Natural Gas Storage Report revealed that working gas in storage increased by +37 Bcf compared to the previous week. This number is a considerable leap compared to the analysts' expectation of a mere +25 Bcf. The previous week's addition was only +9 Bcf.
Key Points:
- Current storage levels are -122 Bcf lower than the five-year average.
- Overall stocks are also -557 Bcf less than last year, reflecting a tightening market.
- Natural gas prices have shown a downturn as traders digest the EIA report.
In light of these numbers, it’s evident that traders are reacting, with natural gas prices losing some ground. The bearish tone of the report has analysts concerned, as the exceeded expectations may indicate underlying weaknesses in market demand.
Market Analysis
Traders are transitioning from the April 2025 contract to May 2025, potentially leading to increased volatility in the near future. Weather forecasts suggest a decrease in natural gas demand in the upcoming days, posing a dilemma for bullish traders.
Technical View: Natural gas is attempting to hold above the critical support range between $3.70 and $3.75. A failure to maintain this could lead to testing lower support levels around $3.35 to $3.40.
Summary
In summary, the recent EIA report highlights a significant increase in natural gas storage that exceeds analyst expectations while still reflecting a systemic shortfall compared to historical averages. It raises questions about price stability and market health moving forward.
Opinion & Analysis
While the storage surge might seem optimistic on the surface, the overall bearish market sentiment could dampen any chances for a price rally in the short-term. Traders and investors should stay vigilant, keeping an eye on upcoming forecasts and market trends.
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