On January 16, 2025, the U.S. Energy Information Administration (EIA) released its Weekly Natural Gas Storage Report. The data showed that working gas in storage fell by 258 billion cubic feet (Bcf) from the previous week, slightly more than the expected decline of 255 Bcf. This is a significant drop compared to the previous week’s decrease of 40 Bcf. Currently, stocks are 111 Bcf lower than they were at this time last year, but 77 Bcf above the five-year average for this period.
The report indicated that cold weather increased demand, contributing to the storage draw, which was mostly in line with analysts’ predictions. However, despite a recent surge in natural gas prices, some traders had anticipated a larger draw and were somewhat disappointed by the EIA data. Overall, the report had a bullish tone, showing a marked decline in gas stocks compared to last year, although they remain above the five-year average.
As traders digest the report, all eyes will be on weather forecasts, particularly the expected Arctic Blast, which is expected to raise energy demand next week.
From a technical perspective, natural gas prices need to stay above $4.15 to maintain upward momentum. A move above this level could push prices toward the next resistance zone around $4.25 to $4.30.
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