Gas prices under pressure as US inventories beat expectations
The EIA reported that natural gas inventories increased by 58 billion cubic feet from last week, beating analysts' expectations of 53 billion cubic feet.
On September 19, the U.S. Energy Information Administration (EIA) released its weekly natural gas storage report. The report showed that natural gas inventories increased by 58 billion cubic feet from the previous week, exceeding analysts' expectations of 53 billion cubic feet.
Current inventory levels are 19.4 Bcf higher than a year ago and 27.4 Bcf above the five-year average. The high inventory levels put bearish pressure on the natural gas market.
Although the natural gas market came under pressure following the release of the report, prices attempted to move off their intraday lows. While the increase in natural gas inventories exceeded analysts' expectations, it is unclear if this report will further exacerbate the bearish sentiment in the market.
Natural gas prices have continued to slide in recent trading, so the market may have already digested the impact of the unfavorable report. Weather forecasts indicate that mild weather is expected to reduce demand in the coming days.
From the technical analysis, natural gas is trying to stabilize below the support level of $2.25 to $2.30. If this attempt is successful, natural gas will gain additional downside momentum and could move down to the next support range of $2.00 to $2.05.
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