Natural gas increased by 0.42% to close at Rs 288.7, buoyed by opportunistic purchases and nearly record levels of LNG export flows that sustained robust overall demand. Earlier in the winter, an Arctic blast resulted in significant withdrawals from storage; however, the current weather outlook has shifted to a milder trend. Predictions indicate that temperatures will exceed normal levels throughout a significant portion of the U.S., especially in the central and southern areas, with a gradual eastward expansion anticipated.

This transition is expected to reduce heating and power consumption, which may exert downward pressure on prices in the short run. On the supply side, production in the Lower 48 states has averaged 106.99 bcfd thus far in February, marginally exceeding January levels, yet remaining below the record set in December. Demand, encompassing exports, is anticipated to decline from 142.5 bcfd this week to 130 bcfd in the following week. LNG exports continue to exhibit robustness at 18.3 bcfd, approaching the peak levels observed in December.

In the interim, storage data indicated a historic withdrawal of 360 bcf for the week concluding January 30, markedly exceeding seasonal averages. Looking ahead, the EIA anticipates that output will reach new highs through 2027, whereas domestic consumption is expected to decline modestly.

The market is currently experiencing new buying activity, accompanied by an increase in open interest. Support is identified at Rs 280.7, with additional downside potential at Rs 272.6. Resistance is observed at Rs 294.3, with a breach of this threshold potentially driving prices to Rs 299.8.