Natural gas declined by 2.8%, closing at Rs 257.1, influenced by forecasts of milder weather anticipated to reduce heating demand. Warmer conditions prevailing across a significant portion of the western United States as the month concludes have diminished expectations for a late-season cold snap, thereby alleviating apprehensions regarding constrained winter supplies. As winter approaches its conclusion, there is a noticeable decline in demand from both the residential heating sector and the power industry.

On the supply side, production continues to exhibit strength. In February, output in the Lower 48 states is averaging 108.7 bcfd, reflecting an increase from the levels observed in January. LNG exports, however, persist in offering substantial support, maintaining a robust level at 18.7 bcfd and remaining poised for a monthly record. Storage data presented a varied landscape. U.S. utilities recorded a withdrawal of 52 billion cubic feet for the week ending February 20, which was marginally above projections yet significantly lower than the 252 billion cubic feet draw observed during the same period last year.

Total inventories currently amount to 2.018 tcf, reflecting a 7.5% increase compared to the same period last year and a marginal 0.3% decrease relative to the five-year average. The previously observed storage deficit is diminishing rapidly as a result of temperate weather conditions. In the coming years, the EIA anticipates unprecedented production levels in 2026 and 2027, with demand projected to remain stable at approximately 91.6 bcfd.

The market is currently experiencing new selling pressure, as evidenced by a 12.55% increase in open interest, bringing it to 26,470. Support levels are identified at Rs 252.8 and Rs 248.6, whereas resistance is positioned at Rs 261.7. A breach of this level may challenge Rs 266.4.