Natural gas prices increased by 1.8%, concluding at Rs 283.4, bolstered by projections indicating heightened demand in the forthcoming two weeks. In September, U.S. output has averaged 107.4 bcfd to date, a decrease from August’s peak of 108.3 bcfd, with daily production poised to reach a 10-week low of 106.3 bcfd. Previous high levels of supply facilitated strong storage increases, resulting in inventories approximately 6% above the five-year seasonal average.

The most recent report indicated a storage injection of 75 bcf for the week ending September 19, aligning closely with expectations and markedly surpassing last year’s 47 bcf build. Total storage increased to 3,508 bcf, reflecting a 0.6% rise compared to the previous year and a 6.1% increase relative to the five-year average. Weather forecasts indicate predominantly warmer-than-normal conditions extending into early October, which is expected to bolster near-term consumption.

The demand for LNG exports continues to exhibit robustness, as feedgas flows averaged 15.7 bcfd in September, marginally lower than the figures recorded in August. In the longer term, the EIA’s Short-Term Energy Outlook anticipates that U.S. dry gas production will increase to 106.6 bcfd by 2025, subsequently declining to 106.0 bcfd in 2026. This projection coincides with an expected demand growth, reaching a record high of 91.5 bcfd in the coming year. LNG exports are projected to increase from 11.9 bcfd in 2024 to 14.7 bcfd in 2025, reaching 16.3 bcfd in 2026, thereby supporting sustained long-term demand growth.

From a technical perspective, the market is experiencing short covering, evidenced by a 7.7% decline in open interest to 25,090, alongside a price increase of Rs 5. Support is identified at Rs 278.1; should this level be breached, Rs 272.8 may come into play. Conversely, resistance is positioned at Rs 289.5, with a potential breakout above this threshold possibly driving prices toward Rs 295.6.