Natural gas experienced an increase of 1.56% yesterday, closing at Rs 253.6. This rise was underpinned by predictions of warmer-than-normal weather throughout the U.S., which heightened expectations for stronger demand as we move into early October.

LSEG has forecasted that average U.S. gas demand, inclusive of exports, will increase from 101.1 bcfd last week to 104.2 bcfd this week. In the Lower 48 states, output has averaged 107.3 bcfd in September, a decrease from the record 108.3 bcfd established in August, which provides additional support for prices. The U.S. Energy Information Administration disclosed a build of 90 bcf for the week ending September 12, surpassing expectations of 81 bcf.

This figure was markedly greater than the 56 bcf build recorded last year and the five-year average of 74 bcf, maintaining storage levels at 6.3% above the five-year norm, while remaining slightly below last year’s levels by 0.1%. Market participants monitored Hurricane Gabrielle, currently classified as a Category 3 storm, as its trajectory may impact production and demand dynamics. Anticipating future trends, the U.S. Energy Information Administration projects that natural gas production and consumption will reach unprecedented levels in 2025, followed by a modest decline in 2026. Dry gas production is anticipated to increase to 106.6 billion cubic feet per day in 2025, whereas consumption is expected to reach 91.5 billion cubic feet per day.

From a technical perspective, the market is experiencing short covering, evidenced by a decline in open interest of 19.23% to 14,497, alongside a price increase of Rs 3.9. Support is established at Rs 248.5, beneath which prices could potentially reach Rs 243.3. Conversely, resistance is identified at Rs 256.6, with a breakthrough above this level paving the way to Rs 259.5.