Natural Gas Futures Show Promise Ahead of EIA Report

Natural Gas Futures Climb Ahead of EIA Report

Natural Gas futures are climbing as traders anticipate the Energy Information Administration's (EIA) Weekly Storage report. This report, scheduled for release today, is expected to show a smaller-than-average injection into storage, providing a bullish catalyst. However, traders face significant resistance levels that may cap potential gains.

Key Resistance Levels in Focus

• Natural Gas futures are encountering significant technical resistance, particularly at the 50% retracement level at $2.939.
• The 200-day moving average stands at <$2.968>, which is another hurdle for upward momentum.
• Yesterday's test of the psychological $3.00 had limited success, but a breakout could accelerate purchases, eyeing the Fibonacci level at $3.110.

Market Anticipates Bullish EIA Report

Traders are preparing for the EIA report, likely reflecting a build of +56 billion cubic feet (Bcf), significantly below the five-year average of +98 Bcf.

Factors such as warmer weather across the U.S. and a dip in wind energy contribution have played a part in boosting natural gas usage, enhancing the bullish outlook.

Near-Term Weather Outlook and Demand

Although regions like California and Texas are experiencing heat waves, overall natural gas demand is projected to be subdued this coming week.

Market Forecast: Cautiously Bullish

The natural gas market appears cautiously bullish short term; a smaller injection would support prices if resistance at $3.00 is breached. Conversely, any failure at these resistance points may prompt a retest of lower support levels.