Natural Gas Storage Report – EIA report natural gas released on Jan-11:

The Energy Information Administration (EIA) Natural Gas Storage report measures the change in the number of cubic feet of natural gas held in underground storage over the prior week. EIA report releases every Thursday of week at 10.00 am EST

natural gas storage report

EIA Natural Gas report is released by U.S. Energy Information Administration and depicts natural gas production in US but it largely impacts Canadian Dollar since Canada has huge energy sector.

There are many research agencies like Reuters, IAF Advisors, Bespoke Weather Services, Intercontinental Exchange and Bloomberg that call for withdrawal numbers before the report is released and based on these investors or analyst work on fundamentals.

If the increase in natural gas inventories is more than expected, it implies weaker demand and is bearish for natural gas prices. The same can be said if a decline in inventories is less than expected. If the increase in natural gas is less than expected, it implies greater demand and is bullish for natural gas prices. The same can be said if a decline in inventories is more than expected.

EIA Natural Gas Storage report for Jan 11

Estimates for today EIA report were calling for double digit withdrawal for the week ending Jan 4.

Reuters was calling for a withdrawal of 76 Bcf, with a range of estimates from minus 50 Bcf to minus 115 Bcf. Bloomberg is estimating a 72 Bcf withdrawal, with forecasts ranging from minus 25 Bcf to minus 100 Bcf.

Last year for the week-ending January 5, the EIA reported a record 359 Bcf withdrawal. According to the EIA, the five-year average for the period is a withdrawal of 182 Bcf.

Looking at EIA Natural Gas Storage report released today, there is a net decrease of 91bcf (billion cubic feet) which is way high than expectations. The expectations were around 68bcf. For more details click here

Forecast - Based on the EIA Natural Gas Storage report, prices should trade in positive. Also an optimism about US-China trade deal could be beneficial to price action as it will increase the demand for LNG and put a floor under natural gas prices.
For upcoming sessions, once can go long in natural gas with target of 225 for Jan contract with stop loss of 203. Please follow strict stop loss since natural gas is highly speculative commodity.

 Read disclaimer before investing

Post a comment