Natural gas prices moved lower as traders reacted to the EIA report. The report was bearish as inventory build exceeded analyst expectations.
Natural gas production stays at high levels, and even hot weather in the first half of summer did not provide sustainable support to the market.
With no improvements in supply/demand balance, bulls may hope that hot weather would boost demand for natural gas next week. However, recent data shows that inventory levels continue to grow due to high production.
From the technical point of view, natural gas is trying to settle below the nearest support level at $2.00 – $2.05. In case this attempt is successful, natural gas will head towards the next support level, which is located in the $1.80 – $1.85 range. RSI remains in the moderate territory, so there is plenty of room to gain additional momentum. The technical picture remains bearish, and natural gas needs significant positive catalysts to break the current trend.
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