On October 31, EIA released its Weekly Natural Gas Storage Report. The report showed that working gas in storage increased by +78 Bcf from the previous week, compared to analyst consensus of +81 Bcf. In the previous week, working gas in storage increased by +80 Bcf.

At current level, stocks are 107 Bcf higher than last year and 178 Bcf above the five-year average for this time of the year. High storage levels serve as a bearish catalyst for natural gas markets.

Natural gas  pulled back as traders reacted to the EIA report. While the report missed analyst consensus of +80 Bcf, it showed that inventories continued to increase at a robust pace.

Natural gas traders also focus on weather outlook, which may put additional pressure in the upcoming trading sessions. Weather forecasts indicate that conditions in the first half of November will be warmer than usual, which is bearish for natural gas prices.

From the technical point of view, natural gas is trying to settle below the support at $2.75 – $2.80. RSI is in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge. A move below the $2.75 level will push natural gas prices towards the $2.60 level.

For a look at all of today’s economic events, check out our economic calendar.