Natural gas prices concluded the trading session with an increase of 2.68% at Rs 352, influenced by mixed weather forecasts that contributed to fluctuations in demand expectations. Commodity Weather Group reported that the first week of February will experience slightly colder-than-normal conditions across the eastern U.S., which is likely to bolster near-term heating demand. This will be succeeded by relatively warmer weather in northern regions, thereby limiting any potential upside.

The market exhibits heightened sensitivity following a recent rally influenced by weather conditions, as traders exercise caution in light of swift changes in forecasts. On the supply side, U.S. gas production has rebounded to approximately 102.1 bcfd as output has recovered from storm-related disruptions that had temporarily removed over 15% of supply from the market. Inventory data offered further validation, as U.S. utilities extracted 242 bcf of gas in the week ending January 23, significantly exceeding the five-year average draw of 208 bcf, indicative of heightened heating demand.

Total gas in storage decreased to 2.823 tcf; however, stocks are still in a comfortable position, being 7.9% higher than last year’s figures and approximately 5.3% above the five-year average. In the coming years, the U.S. Energy Information Administration anticipates that dry gas production will reach unprecedented levels in 2026 and 2027, whereas domestic consumption is forecasted to decline. Nonetheless, LNG exports are projected to rise consistently, offering a fundamental demand buffer.

From a technical perspective, the market is experiencing new buying activity, evidenced by an 8.43% increase in open interest coupled with a price gain of Rs 9.2. Support is identified at Rs 343.1, with potential testing of Rs 334.1 if prices fall below this level. Resistance is noted at Rs 362.2, and a breakout above this point could propel prices towards Rs 372.3.