Natural gas prices increased by 2.51%, closing at Rs 290.2, bolstered by projections indicating heightened demand in the forthcoming fortnight. Nonetheless, the potential for growth was constrained by increasing daily production and sufficient storage capacities. In Canada, producers have begun to significantly reduce output following a supply surplus that has driven Alberta’s AECO hub prices to unprecedented negative levels, trading as low as minus 18 cents this week before settling at an average of minus 5 cents.

In the interim, U.S. drilling activity experienced a modest downturn, as evidenced by a reduction in the natural gas rig count, which decreased by one to 117. Production trends exhibited variability, as average U.S. output in the Lower 48 states decreased to 107.5 bcfd in September from a peak of 108.3 bcfd in August, although daily production experienced a resurgence, reaching a three-week high of 108.4 bcfd.

Earlier this year, record output facilitated substantial storage injections, resulting in inventories currently standing 6% above the five-year average. The most recent data indicated a 75 bcf increase in storage for the week concluding September 19. The EIA’s Short-Term Energy Outlook anticipates that U.S. natural gas production and consumption will achieve unprecedented levels in 2025, with figures of 106.6 bcfd and 91.5 bcfd, respectively, before experiencing a modest decline in 2026. LNG exports are projected to increase consistently, attaining 16.3 bcfd by 2026.

From a technical perspective, the market experienced short covering, evidenced by a decline in open interest of 10.8% to 23,830, coinciding with a price increase of Rs 7.1. Support is currently established at Rs 281.7, with an additional level at Rs 273.2. Resistance is identified at Rs 296, and a breach above this level could propel prices towards Rs 301.8.