Natural gas prices experienced a significant decline, closing 2.8% lower at Rs 403.4. This drop was influenced by near-record production and adequate storage levels, even in the face of robust LNG flows and anticipations of colder weather on the horizon. Output in the Lower 48 is experiencing a notable increase, with LSEG indicating 109.4 bcfd thus far in November, an uptick from 107.4 bcfd in October, and exceeding the prior monthly peak of 108.3 bcfd recorded in August.

Forecasts indicate a moderate increase in weather-related demand, with expectations of predominantly warmer-than-normal conditions extending through December 6. However, there are anticipated instances of colder weather around November 28–29 and December 3–5. LSEG anticipates that total U.S. gas demand, encompassing exports, will rise from 118.8 bcfd this week to 119.7 bcfd next week, and subsequently to 131.3 bcfd in the week thereafter. The EIA disclosed a 14 bcf withdrawal for the week ending Nov 14, aligning with projections and standing in stark contrast to the previous year’s injection as well as the five-year average increase.

Notwithstanding this draw, inventories are sufficiently supplied owing to this year’s unprecedented production levels. The EIA’s STEO anticipates that both production and consumption will achieve unprecedented levels by 2025, with dry gas output expected to hit 107.1 bcfd and LNG exports increasing to 14.7 bcfd next year, further rising to 16.3 bcfd in 2026.

Natural gas continues to experience significant long liquidation, as evidenced by a dramatic 79.7% decline in open interest, bringing it down to 877. Immediate support stands at Rs 397.4, with subsequent support at Rs 391.3. Resistance is identified at Rs 409.1, and a breakout may propel prices toward Rs 414.7.