Natural gas yesterday settled 2.10% higher at Rs 408.3, buoyed by robust fundamentals stemming from record LNG export flows and anticipations of colder weather conditions in the U.S. Record-high output persists in shaping supply dynamics, as Lower 48 production averaged 109.7 bcfd in November, an increase from 107.4 bcfd in October, and exceeding the prior record of 108.3 bcfd set in August. Despite this elevated supply, the prospects for demand have improved significantly. Meteorologists project that temperatures in the U.S. will remain below normal until mid-December, which is likely to increase heating demand.

LSEG anticipates that total U.S. gas demand, encompassing exports, will increase from 122.6 bcfd this week to 140.1 bcfd next week, despite next week’s estimate being marginally lower than previous forecasts. In November, flows to U.S. LNG export terminals have reached new heights, averaging 18.1 bcfd, indicative of robust global demand and the complete utilization of liquefaction capacity.

Storage dynamics continue to exhibit supportive trends, as evidenced by the EIA’s report of a 14 bcf withdrawal, which aligns with forecasts and stands in contrast to a 3 bcf injection recorded during the corresponding week last year. Storage levels are currently approximately 4–5% higher than seasonal averages, supported by the increased production observed this year.

The market is experiencing short covering, evidenced by a 30.89% decline in open interest to 15,835, alongside an Rs 8.4 increase in prices. Natural gas currently has a support level at Rs 398.9, with potential for additional decline towards Rs 389.5. Resistance is positioned at Rs 416.1, and a breakout could potentially pave the way toward Rs 423.9.