Bearish weather forecasts keep natural gas prices under pressure

Key Insights

  • Working gas in storage declined by 117 Bcf from the previous week. 
  • Natural gas stocks are 254 Bcf higher than last year at this time. 
  • Natural gas is losing ground as demand is expected to remain weak in the near term. 

On December 7, EIA released its Weekly Natural Gas Storage report. The report indicated that working gas in storage declined by 117 Bcf from the previous week.

Analysts expected that working gas in storage would decrease by 105 Bcf, so the draw exceeded analyst expectations.

At current levels, stocks are 254 Bcf higher than last year at this time and 234 Bcf higher than the five-year average of 3,485 Bcf.

It remains to be seen whether the report would provide the much-needed support for natural gas bulls. The current demand for natural gas remains low.

In addition, forecasts indicate that weather is expected to be warmer than normal, so demand for natural gas would remain weak.

Exxon Mobil delayed the start data of the Golden Pass LNG terminal, which is now expected to start producing LNG in the first half of 2025. Previously, the terminal was projected to start working in late 2024. The news served as an additional bearish catalyst for natural gas markets.

From a big picture point of view, the market sentiment in natural gas markets remains bearish. Most likely, natural gas prices will need significant positive catalysts to settle above the nearest resistance in the $2.60 – $2.65 range.

In conclusion, the bearish sentiment in natural gas markets may impact forex and trading strategies in the near term.

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