Natural gas prices experienced a significant increase, closing up by 7.33% at Rs 352.9, as a severe Arctic blast caused the freezing of oil and gas wells and pipelines throughout the United States, resulting in production levels dropping to a two-year low. Frigid temperatures affecting extensive regions of the nation increased the demand for heating and power, placing significant pressure on electricity grids. The winter storm resulted in a reduction of nearly 12% in U.S. natural gas output, as average production in the Lower-48 states decreased to approximately 106.9 bcfd in January, down from a record high of 109.7 bcfd in December. Gas flows to U.S. LNG export facilities have decreased to their lowest level in a year.

PJM Interconnection has announced a level-one emergency, requiring power plants to be fully prepared and permitting the diversion of supply from industrial consumers to residential and healthcare facilities, highlighting the heightened risks associated with supply availability. In the realm of energy storage, U.S. energy companies extracted 120 billion cubic feet of gas for the week concluding January 16, marginally surpassing forecasts.

Inventories decreased to 3.065 tcf, remaining 4.8% above the previous year and 6.1% higher than the five-year average, indicative of earlier mild weather conditions. Market attention has transitioned towards forthcoming reports, with anticipations of significantly larger withdrawals as intense cold elevates heating demand.

From a technical perspective, the market is experiencing new buying activity, as evidenced by a 21.3% increase in open interest to 14,952, alongside a price rise of Rs 24.1. Natural gas exhibits support at Rs 338.4; a decline beneath this level may lead to a test of Rs 324. Resistance is identified at Rs 360.8, and a breakthrough could pave the way towards Rs 368.8.