Natural gas experienced a notable increase of 7.62% yesterday, closing at Rs 303.7. This rise can be attributed to predictions of colder weather and anticipated higher demand in the coming fortnight, alongside robust LNG export activity. In October, the average flows to the eight major U.S. LNG export plants reached 16.6 billion cubic feet per day, exceeding September’s 15.7 billion cubic feet per day and surpassing the prior record of 16.0 billion cubic feet per day established in April.

Daily LNG feedgas reached a new peak of 17.4 bcfd, primarily driven by unprecedented inflows to Venture Global’s Plaquemines plant in Louisiana, which accounted for 3.9 bcfd. Production has consistently hovered around 108 bcfd, although the average for October has experienced a minor decline to 107 bcfd, down from 107.5 bcfd in September. Notwithstanding this, previous record production contributed to an increase in storage, which currently stands approximately 4.5% above the five-year average and 0.9% higher than the same period last year, indicating ample supply conditions.

The most recent data indicated an injection of 87 bcf into storage for the week ending October 17, surpassing both forecasts and historical averages. The U.S. Energy Information Administration anticipates unprecedented levels of natural gas production and consumption by 2025, forecasting dry gas output to reach 107.1 billion cubic feet per day (bcfd) and demand to increase to 91.6 bcfd. LNG exports are projected to reach 14.7 bcfd next year, an increase from 11.9 bcfd in 2024.

From a technical perspective, the market is experiencing short covering, evidenced by a 44.36% decline in open interest to 5,265, while prices have increased by Rs 21.5. Support levels are identified at Rs 290 and Rs 276.3, while resistance levels are noted at Rs 311.7 and Rs 319.7.