Natural Gas Market Faces Crucial Test After EIA Inventory Report
The natural gas market faces a crucial test after the EIA inventory report released on Thursday. The October contract had reached $3.076 early in the session, but is now trading lower. According to the daily swing chart, the main trend is up, and a trade through $3.076 would signal a resumption of the uptrend.
The October contract is also trading above its 50-day moving average at $2.854, which provides support. However, on the downside, the first cluster of resistance lies between $2.817 and $2.805.
Surveys are predicting a storage build between 50 bcf to 53 bcf for Thursday's EIA report. This is higher than last week's 44 bcf build, which came in below the estimate of 48 bcf.
The market's momentum has faded since Wednesday's rally, and the two-day rally needs a build below 50 bcf to hold together. The current break from $3.076 shows that buyers are not willing to keep taking offers before the number hits.