How has EIA storage data impacted the market?

The US Energy Information Administration (EIA) reported a modest storage withdrawal of 2 Bcf for the week ended November 22, falling short of expectations for a 3 Bcf decline. This was well below the five-year average withdrawal of 30 billion cubic feet over the same period, suggesting sufficient supply. Inventories remain 7.2% above seasonal norms, indicating a well-supplied market. This pessimistic data contributed to downward pressure on prices midweek, dampening optimistic sentiment despite colder weather in certain regions.

Will winter weather boost demand?

Colder temperatures across the Midwest supported regional heating needs, with lows between 10 and 30 degrees Fahrenheit. NatGasWeather reported increased demand early in the weekend as colder air pushed south. However, forecasts for early December show mixed signals, with mild conditions likely to return in key regions. This weather uncertainty has kept traders cautious.

In terms of fundamentals, dry gas production in the lower 48 countries remained stable at 103.4 Bcf/d, slightly below last year, while LNG exports remained stable at 13.1 Bcf/d. Electricity generation increased 3.86% year-on-year, driven by strong demand from utilities. These factors ensured a stable demand environment despite the diminishing influence of excess supply.

Will key technical levels influence the market’s next move?