Natural gas prices increased by 3.05% to Rs 425.7, bolstered by heightened demand expectations and vigorous LNG export activity. In November, U.S. LNG terminals experienced record flows, averaging 18.1 bcfd, compared to 16.6 bcfd in October, which bolstered market sentiment. Forecasts indicating colder-than-normal weather through December 11 have led to an increase in heating demand projections.

Total U.S. gas consumption, including exports, is anticipated to rise from 122.6 bcfd this week to 140.1 bcfd next week, as per reports. In a notable development, U.S. storage experienced a withdrawal of 11 bcf, surpassing the anticipated figure of merely 1 bcf. This adjustment brought inventories down to 3,935 bcf, positioning stocks 0.8% lower than the previous year, while remaining 4.2% above the five-year average.

Nonetheless, the increases were limited by unprecedented production levels and a decline in European prices associated with ongoing discussions regarding peace in Ukraine. In November, U.S. output reached a new peak of 109.7 bcfd, exceeding the levels recorded in October and surpassing prior monthly benchmarks. Robust supply levels this year facilitated storage builds that exceeded typical norms. The EIA’s latest outlook further reinforced the supply-heavy picture, projecting dry gas production to reach 107.1 bcfd in 2025 and 107.4 bcfd in 2026, alongside record domestic demand.

From a technical perspective, the market is currently experiencing a new buying phase, as evidenced by a 49.64% increase in open interest to 23,971, coinciding with rising prices. Natural gas currently has a support level at Rs 413.8, with potential for further decline toward Rs 401.9 should this threshold be breached. Resistance is positioned at Rs 433.9, and a breakout may propel prices towards Rs 442.1.