Natural gas prices experienced an increase, closing up 3.06% at Rs 289.7, bolstered by a stronger-than-anticipated withdrawal from U.S. storage, indicating robust near-term demand. The U.S. Energy Information Administration reported a decline in inventories of 54 billion cubic feet for the week ending March 20, significantly surpassing market expectations. Total stockpiles have decreased to 1.829 trillion cubic feet, remaining marginally above both the levels recorded last year and the seasonal average.

Nonetheless, this may represent the final substantial draw of the winter season, as projections indicate a rise in temperatures heading into early April, which generally diminishes heating demand. Concurrently, geopolitical developments are under scrutiny, as Donald Trump postpones possible measures regarding Iran, providing a degree of respite to global energy markets.

Nevertheless, U.S. gas prices persist in exhibiting a degree of stability, attributed to a robust domestic supply and minimal vulnerability to international disruptions. On the supply side, production continues to exhibit robustness, averaging 109.6 bcfd in March, whereas demand is anticipated to remain around 110 bcfd in the short term. Anticipating future trends, the EIA projects that production will reach unprecedented levels through 2027, despite a minor decline in domestic consumption anticipated for 2026.

From a technical perspective, the market is experiencing short covering, as evidenced by a 10.64% decline in open interest to 20,793 lots, accompanied by a price increase of Rs 8.6. Support stands at Rs 281.1, and a breach below this level could lead to a test of Rs 272.4. On the upside, resistance is identified at Rs 295.2, and a breach of this level may facilitate an extension of gains towards Rs 300.6.