On July 25th, the US Energy Information Administration (EIA) released its weekly natural gas inventory report. The report shows that working gas reserves increased by 22 billion cubic feet compared to the previous week, exceeding analysts' expectations of 15 billion cubic feet. Last week, natural gas inventories increased by 10 billion cubic feet.

The current reserves are 249 billion cubic feet higher than the same period last year and 456 billion cubic feet higher than the five-year average. Overall, high inventory levels remain the main bearish factor in the natural gas market.

As traders reacted to the EIA report, natural gas prices fell. The report shows that inventory growth exceeded analysts' expectations, which is a negative news.

Natural gas production remains at a high level, and even the hot weather in the first half of summer has failed to provide sustained support for the market.

In the absence of an improvement in supply and demand balance, investors may hope that the cold weather will increase natural gas demand. However, the latest data shows that due to high production, inventory levels continue to increase.

From a technical perspective, natural gas is attempting to break below the recent support level of $2.00-2.05. If this attempt is successful, natural gas prices will move towards the next support level of $1.80-1.85. The Relative Strength Index (RSI) is still at a moderate level, so there is enough room to gain more momentum. Technically, it is still bearish, and natural gas requires significant positive factors to break the current trend.