Natural gas prices experienced significant downward pressure, closing 4.15% lower at Rs 244.8, as the market responded to substantial storage builds and anticipations of ongoing strong injections in the weeks ahead. The prevailing bearish sentiment was primarily influenced by abundant supply conditions, characterized by a significant increase in inventories. The most recent figures indicated a substantial injection of 103 bcf for the week ending April 17, significantly surpassing market expectations of 94 bcf and the five-year average of 64 bcf.

Total stockpiles have now reached 2.063 trillion cubic feet, approximately 7% higher than both the previous year’s figures and the seasonal average, thereby bolstering the narrative of oversupply. Notwithstanding this weakness, losses were partially mitigated by a reduction in production and robust LNG export flows. Production in the United States. The Lower 48 states has decreased to approximately 110.3 bcfd in April, with daily production declining by nearly 3.8 bcfd over the past few weeks, reaching an 11-week low.

Concurrently, the robustness of export demand persists, averting a more pronounced decline. Nevertheless, the short-term demand outlook appears subdued, with projections indicating a decline in consumption to approximately 100.5 bcfd in the coming week due to mild weather conditions. From a broader perspective, the supply outlook continues to appear substantial. The EIA maintains its forecast for unprecedented production levels extending through 2026 and into the future, with a slight anticipated decline in demand before a rebound in 2027.

From a technical perspective, the market is experiencing long liquidation, as evidenced by an 11.56% decline in open interest in conjunction with decreasing prices. Immediate support is identified at Rs 238.5, with a breach possibly leading to a test of Rs 232.3. On the upside, resistance is positioned at Rs 254.1, and a breach above this level may propel prices toward Rs 263.5.