Natural gas prices concluded the trading session with a notable decline, decreasing by 5.29% to settle at Rs 315.2, as apprehensions regarding weather-related demand significantly impacted market sentiment. Expectations for heating demand have been notably diminished due to forecasts indicating warmer-than-normal temperatures across the US through January 20. Heating Degree Days are anticipated to stay significantly beneath the 30-year average, with HDDs expected to decline to 367 from 369, in contrast to a typical level of 458, underscoring muted seasonal consumption.

LSEG projects that average gas demand, encompassing exports, in the Lower-48 states will increase only slightly from 133.0 bcfd this week to 134.2 bcfd next week, highlighting constrained near-term demand expansion. Supply-side data exerted additional pressure on prices. LSEG reported that average US natural gas production increased to 109.2 bcfd in January, nearing record levels, albeit slightly under December’s high of 109.9 bcfd. Storage data from the EIA has not met the expectations of bulls, with withdrawals amounting to only 38 bcf for the week ending December 26.

This figure falls short of market anticipations of 50 bcf and is significantly lower than last year’s draw of 112 bcf, as well as the five-year average of 120 bcf. In the future, the EIA anticipates that both production and consumption will achieve unprecedented levels in 2025, with output estimated at 107.7 bcfd, suggesting a substantial availability of supply.

From a technical perspective, the market is experiencing renewed selling pressure, as evidenced by a 4.12% increase in open interest to 25,676, alongside a price decline of Rs 17.6. Natural gas exhibits immediate support at Rs 303.8; a breach beneath this level may lead to prices approaching Rs 292.5. On the upside, resistance is identified at Rs 327, and a movement beyond this threshold could propel prices toward Rs 338.9.