EIA Natural Gas Reserves Fall Short of Expectations, Up Only 79 Billion Cubic Feet
Gas prices continue to rebound from May lows as traders react to EIA report。
On May 9, the U.S. Energy Information Administration (EIA) released its weekly natural gas storage report. The report revealed that natural gas inventories increased by 7.9 billion cubic feet last week, slightly below analysts' expectations of a 8.7 billion cubic feet addition.
At current levels, inventories stand at 44.4 billion cubic feet higher compared to the same period last year, and 640 billion cubic feet above the five-year average.
Natural gas prices rose as the storage build fell short of analyst expectations, prompting traders to react to the EIA report.
Currently, moderate demand for natural gas persists in Texas due to warm weather conditions. However, weather forecasts indicate a decline in demand starting from Friday.
From a macro perspective, natural gas prices continue to rebound from support levels around $1.95 - $2.00 per pound. Traders are betting that the supply-demand balance in the natural gas market will become more bullish in the coming weeks.
It's worth noting that the active natural gas rig count in the U.S. has recently dropped to its lowest level in 2.5 years, indicating producers are attempting to restrain supply due to low natural gas prices. With inventories remaining high, it remains to be seen whether the reduction in rig count is sufficient to support the natural gas market.
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