Natural gas prices increased, closing up by 1.94 percent at Rs 362.9, bolstered by near-record gas flows to LNG export facilities and anticipations of demand exceeding earlier forecasts. Robust export activity persists in supporting prices, despite the fact that domestic production levels remain high. Average gas output in the Lower 48 states has decreased slightly to 109.5 bcfd thus far in December, which is marginally lower than the record levels observed in November, as reported. Nonetheless, this figure continues to indicate sufficient supply conditions.

In light of elevated production levels, the dynamics of storage continue to be a critical area of attention. US energy firms extracted 177 billion cubic feet of gas from storage in the week ending December 5, representing the fourth consecutive week of withdrawals consistent with seasonal patterns. Total inventories reached 3,746 bcf, approximately 0.7 percent lower than the previous year’s figures, yet 2.8 percent higher than the five-year average, suggesting a favorable supply situation.

Earlier in the year, record output has enabled producers to increase inventories to approximately 1 percent above the norm. On the demand side, meteorological conditions persist in constraining potential growth. Meteorologists anticipate that temperatures throughout the majority of the US will stay above the seasonal average until January 1, leading to a decrease in heating demand.

From a technical perspective, the market is experiencing renewed buying interest, evidenced by a 2.39 percent increase in open interest and a price gain of Rs 6.9, indicating the establishment of new long positions. Support is identified at Rs 356.3, and a breach beneath this level would expose prices to Rs 349.8. On the upside, resistance is positioned at Rs 367.8, and a sustained movement above this level could result in a test of Rs 372.8.