Natural gas futures experienced a significant increase, climbing 4.68% to Rs 402.8, bolstered by a transition to colder weather forecasts as early December approaches. The recent European model has incorporated increased heating demand for late November and early December, leading to a resurgence in purchasing activity following several days of upward adjustments. Despite winter weather being the primary source of uncertainty, various overarching seasonal forecasts continue to indicate a trend towards colder-than-average conditions. Source observed that models had recently reduced early-December demand, yet the midday update reinstated a portion of that diminished bullish sentiment.

Fundamentally, anticipations regarding the initial storage withdrawal of the season, following last week’s cold snap, are providing support in advance of Thursday’s EIA report. Nonetheless, U.S. production continues to be robust, with Lower-48 output averaging 109.2 bcfd in November, surpassing October figures and approaching record highs, thereby maintaining inventories at 4% above the norm.

LNG feedgas demand remains robust at 18 bcfd thus far in November, an increase from the previous record of 16.7 bcfd in October. Recent data indicated that U.S. energy companies added 45 bcf to storage, resulting in total inventories of 3,960 bcf, surpassing expectations and exceeding the five-year average by 4.5%.

From a technical perspective, the market is experiencing short covering, as evidenced by a 15.48% decline in open interest to 11,064, coinciding with a price increase of Rs 18. Support is established at Rs 389.5, with a breach below potentially leading to a decline toward Rs 376.2. Conversely, resistance is noted at Rs 411.6, and an upward movement could aim for Rs 420.4.