Natural gas prices experienced a significant increase in the prior session, closing 8.04% higher at Rs 295.6, primarily fueled by apprehensions that the intensifying conflict in the Middle East may threaten essential global gas supplies. Market uncertainty has deepened regarding the timeline for the restoration of full operations at QatarEnergy’s Ras Laffan facility, recognized as the largest LNG export hub globally.

With the closure of the Strait of Hormuz, traders are increasingly concerned about extended supply constraints that may restrict global availability. Prices received support from a storage withdrawal in the United States that exceeded expectations, alongside forecasts indicating warmer weather, which may enhance near-term demand. The Trump administration is concurrently assessing potential measures to tackle the escalating energy prices associated with the geopolitical tensions in the region.

In terms of supply dynamics, natural gas production across the Lower 48 U.S. states has averaged 109.5 billion cubic feet per day in March, reflecting a modest increase from the 109.2 billion cubic feet per day recorded in February, as per data from LSEG. However, demand, including exports, is anticipated to decrease from 124.0 bcfd this week to approximately 111.9 bcfd next week. In the latest report, U.S. utilities extracted 132 billion cubic feet of gas from storage for the week concluding February 27, surpassing the anticipated draw of 121 bcf.

From a technical perspective, the market is experiencing short covering, evidenced by a 32.81% decline in open interest to 18,002, while prices have increased by Rs 22. Natural gas currently finds itself with support at Rs 278.8, and a breach below this level could lead to a test of Rs 262. On the upside, resistance is identified at Rs 305.5, and a movement beyond this threshold could propel prices toward Rs 315.4.