Natural gas increased by 1.98%, concluding at Rs 294.2, primarily bolstered by near-record inflows to LNG export terminals. The increase occurred despite the fact that weather forecasts became more temperate and demand projections for the upcoming week were adjusted downward. Meteorologists anticipate that temperatures throughout the majority of the U.S. will persist at levels above the seasonal average until February 26, potentially constraining heating demand following the recent Arctic blast.

Production continues to exhibit strength. Output in the Lower 48 states has averaged 107.5 bcfd so far in February, an increase from January’s 106.3 bcfd, yet remaining below the record high of 109.7 bcfd set in December. LSEG projects that total demand, encompassing exports, will decline from 141.2 bcfd this week to 124.6 bcfd in the following week. Storage data indicates the impact of the recent cold snap.

Utilities recorded a historic withdrawal of 360 bcf for the week ending January 30, significantly exceeding both the draw from the previous year and the five-year average. Inventories currently total 2.463 tcf, marginally under the seasonal average. In the coming years, the EIA projects that U.S. gas production will reach an unprecedented 110 bcfd by 2026, with domestic demand anticipated to remain relatively stable.

From a technical perspective, the market is experiencing short covering, as evidenced by a 6.79% decline in open interest, now at 14,591 lots. Support is identified at Rs 288.2, with a potential decline towards Rs 282.1. Resistance is positioned at Rs 300.7; a breach above this level may aim for Rs 307.1.