Natural gas prices concluded the trading session at Rs 280.4, reflecting a decline of 0.95%, influenced by storage data that suggests a more relaxed balance between supply and demand. U.S. gas inventories experienced a decline of 71 bcf in the most recent week, falling short of market expectations which anticipated a draw of 90 bcf. This figure is also considerably lower than last year’s withdrawal of 227 bcf and the five-year average of 146 bcf. The modest draw was indicative of warmer-than-normal weather conditions, which diminished heating demand and fostered a bearish sentiment in the market.
Total storage levels currently register at 3.185 tcf, reflecting an increase of approximately 1% compared to the previous year and exceeding the five-year average by 3.4%, indicating a robust inventory situation. Contributing to the downward trend, LNG feedgas flows have diminished in recent days, leading to a decrease in export-linked demand; however, preliminary indications of a recovery in flows have begun to surface. Production has declined slightly from the record highs observed in December, yet it continues to be historically high.
Weather forecasts persist in indicating colder-than-normal conditions extending through late January, with the most frigid period anticipated around mid-month. Nevertheless, demand expectations for the upcoming week have been adjusted downward, which constrains potential upward support. Looking ahead, the EIA anticipates that U.S. natural gas output will reach new highs in 2026–27, whereas domestic consumption is expected to experience a slight decline. LNG exports are projected to rise consistently, providing a degree of medium-term demand support.
The market is experiencing a phase of long liquidation, evidenced by a 1.57% decline in open interest in conjunction with decreasing prices. Support is identified at Rs 272.4, with a breach potentially leading to a decline toward Rs 264.3. Resistance is positioned at Rs 291.2, and a breach of this threshold may propel prices towards Rs 301.9.