Natural gas prices experienced a decline of 2.81%, settling at Rs 377.2, as increased production and forecasts of mild weather negatively impacted demand expectations. Meteorological models forecast above-normal temperatures throughout a significant portion of the U.S. until mid-November, resulting in heating demands remaining below seasonal averages. In November, production in the Lower 48 states has risen, averaging approximately 107 billion cubic feet per day, an increase from the levels observed in October, thereby intensifying supply pressures.

The record-high output observed earlier this year has led to an increase in storage inventories, which currently exceed the seasonal average by 4%. This suggests a favorable supply situation as we approach the peak demand period of winter. The U.S. Energy Information Administration reported that energy firms injected 74 billion cubic feet of natural gas into storage for the week ending October 24, exceeding the anticipated 71 bcf build. Total storage reached 3,853 bcf, reflecting a 0.8% increase compared to the previous year and standing 4.6% above the five-year average.

The EIA has projected record levels of production and consumption for 2025, estimating that dry gas output will increase from 103.2 bcfd in 2024 to 107.1 bcfd in 2025, followed by a further rise to 107.4 bcfd in 2026. Domestic demand is anticipated to experience modest growth, while LNG exports are projected to increase to 14.7 bcfd in 2025 and 16.3 bcfd in 2026, indicative of strong international demand.

The market experienced a significant long liquidation, evidenced by a reduction in open interest of 18.28%, bringing it down to 17,389, coinciding with a price decline of Rs 10.9. Natural gas establishes a support level at Rs 373 and Rs 368.8, with resistance identified at Rs 383.6 and Rs 390.