Natural gas experienced a notable increase of 3.94%, reaching Rs 413.8, as market participants adjusted their positions in anticipation of a possible cold spell in December and heightened demand from the power sector, even in the face of forecasts suggesting milder temperatures in the coming week. Rising LNG export activity has significantly influenced market sentiment, as gas flows to the eight major U.S. LNG terminals have averaged 17.8 bcfd in November, an increase from the record 16.7 bcfd observed in October.

These flows are expected to increase further in the upcoming months, thereby tightening the export side of the balance sheet. Domestic demand remains robust, with LSEG projecting that total U.S. gas consumption—including exports—will increase significantly to 118.6 bcfd this week from 108.6 bcfd the previous week, driven by colder weather, before tapering to 114.7 bcfd as temperatures begin to stabilize.

On the supply front, U.S. Lower 48 output continues to achieve record levels, averaging 109 bcfd in November compared to 107 bcfd in October. Strong production has bolstered storage levels, with inventories currently 4% above the seasonal average. Last week, storage increased by 33 bcf, reaching a total of 3,915 bcf. This figure closely aligns with expectations and positions stocks at a mere 0.2% below the levels recorded a year ago.

The market is currently experiencing new buying activity, evidenced by a 10.27% increase in open interest to 22,823, alongside a price gain of Rs 15.7. Support levels are identified at Rs 400.5 and Rs 387.1, whereas resistance is noted at Rs 421.8, with a possible extension towards Rs 429.7.