Natural gas prices increased by 1.25% to Rs 438.9, bolstered by forecasts of colder weather and a more significant-than-anticipated withdrawal from storage, both of which enhanced market sentiment. The ambiguity surrounding the Russia–Ukraine peace talks has introduced additional upside risk, with market participants anticipating that sanctions on Russian gas exports could remain in place, thereby constraining global supply flows. Meanwhile, U.S. output continues to exhibit remarkable strength. As reported by LSEG, production in the Lower 48 states averaged 109.7 bcfd in November to date, exceeding the levels observed in October and approaching record highs. Despite robust output, early winter demand is strengthening sharply—LSEG projects total U.S. demand at 140.6 bcfd this week, a significant increase from last week’s 118.3 bcfd.

The rally was further fueled by storage data. The EIA reported an 11 bcf withdrawal, contrasting with expectations of a minimal 1 bcf draw, indicating the second week of the seasonal withdrawal cycle. Total inventories currently amount to 3,935 bcf, which is marginally lower than the levels recorded last year (–0.8%) but 4.2% higher than the five-year average, offering a degree of cushion in anticipation of peak winter heating requirements.

The EIA’s latest Short-Term Energy Outlook anticipates sustained vigor in both production and consumption. U.S. dry gas output is projected to increase to 107.1 bcfd in 2025 and 107.4 bcfd in 2026, with domestic consumption anticipated to reach 91.6 bcfd in both years.

From a technical perspective, natural gas is currently experiencing a short covering phase, as evidenced by a 2.23% decline in open interest, bringing it to 23,676. Immediate support is positioned at Rs 433.3, with further downside potential extending to Rs 427.6. Resistance is identified at Rs 446.6, and a breakout could propel prices toward Rs 454.2.