Natural gas yesterday concluded with an increase of 1.29% at Rs 385.8, supported by strong demand from LNG export facilities and a storage build in the U.S. that was less than expected. Prices showed strength after the report from the U.S. Energy Information Administration, which revealed a storage injection of 33 billion cubic feet for the week ending October 31. This figure was a bit below the expected 34 bcf, indicating a shift in market balances. Total inventories are at 3,915 bcf, showing a 0.2% decline from last year’s numbers, yet still 4.3% higher than the five-year average, suggesting a stable supply situation that is quite manageable.

Production levels have shown strength, with data indicating that U.S. output has averaged 108.7 billion cubic feet per day so far in November, up from 107.0 bcfd in October and nearing the record of 108.0 bcfd established in August. In the meantime, near-record demand for LNG exports has consistently boosted consumption levels.

The EIA projects that dry gas production will rise to 107.1 bcfd in 2025 and 107.4 bcfd in 2026, while domestic demand is expected to hit a record high of 91.6 bcfd. Expected average LNG exports are set to increase to 14.7 bcfd in 2025 and then to 16.3 bcfd in 2026, compared to a record high of 11.9 bcfd seen this year. Meteorologists expect mostly warmer-than-average conditions until mid-November, potentially resulting in a short-term decrease in heating demand.

From a technical perspective, the market is seeing fresh buying activity, highlighted by a 5.91% rise in open interest to 19,380, along with a price increase of Rs 4.9. Natural gas finds a support level at Rs 379.2; dropping below this point could result in a test of Rs 372.5. On the other hand, resistance is noted at Rs 392.4, and a breakthrough could lead to Rs 398.9.