Natural gas prices experienced a significant decline of 5.58%, concluding at Rs 272.4, as global energy markets softened in response to indications that Iran might be receptive to discussions aimed at resolving the persistent conflict in the Middle East. The prospect of diplomatic negotiations has contributed to a reduction in certain geopolitical risk premiums within energy markets. Nonetheless, supply concerns persist, as the world’s largest LNG facility in Qatar continues to be offline and the Strait of Hormuz remains largely closed.

U.S. President Donald Trump stated that the United States would guarantee safe passage for vessels by offering naval escorts if necessary. On the domestic front, forecasts of warmer weather are anticipated to diminish heating demand, potentially enabling inventories to recover above normal levels by mid-March. Production continues to exhibit robustness, with LNG exports reaching an unprecedented peak in February.

Data from LSEG indicates that average gas output in the Lower 48 states has experienced a minor decline, registering at 109.1 billion cubic feet per day in March, down from 109.2 bcfd in February. Demand, encompassing exports, is anticipated to decrease from 121.4 bcfd this week to 110.9 bcfd next week. In the interim, the average flows to prominent U.S. LNG export facilities have reached 18.6 bcfd in March, marginally lower than the record 18.7 bcfd observed in February.

From a technical perspective, the market is experiencing renewed selling pressure, evidenced by a 12.19% increase in open interest to 24,570, alongside a price decline of Rs 16.1. Natural gas exhibits immediate support at Rs 265.2; a breach of this threshold could lead to a decline in prices towards Rs 258. On the upside, resistance is observed at Rs 282.6, and a movement beyond this threshold could pave the way for a challenge at Rs 292.8.