Natural gas prices increased by 2.39% to close at Rs 261.5, bolstered by decreasing production levels, enhanced short-term demand forecasts, and robust liquefied natural gas export activity. Production in the United States. In April, production in the Lower 48 states has declined, reaching an 11-week low as subdued spot prices have led producers to reduce supply. The constraints on the supply side have provided a degree of price support, even in the face of relatively weak seasonal demand conditions. Weather dynamics persist in exerting a constraining influence.

Mild temperatures in significant regions such as Texas and California have led to a decrease in both heating and cooling demand, occasionally resulting in power and gas prices dipping into negative territory due to an oversupply of renewable energy. Projections indicate a marginally cooler-than-average climate extending into early May; however, this is expected to have a negligible impact on consumption levels. Demand projections indicate a downward trajectory, with anticipated usage decreasing from 103.7 bcfd this week to approximately 100 bcfd in the following fortnight. On the storage front, inventories continue to exhibit strength.

U.S. energy firms injected 103 billion cubic feet of gas into storage for the week ended April 17, significantly exceeding both last year’s figures and the five-year average. Total stockpiles currently amount to 2.063 trillion cubic feet, suggesting a robust supply as the market navigates the refill season. In the interim, the EIA’s long-term forecasts indicate an upward trajectory in production extending to 2027, coupled with moderate variations in domestic demand and sustained expansion in LNG exports.

From a technical perspective, the market is experiencing short covering, as evidenced by a 1.71% decrease in open interest to 25,872, which suggests the exit of bearish positions. Natural gas encounters immediate support at Rs 255.5, with potential further decline toward Rs 249.6. Resistance is identified at Rs 266.6, and a breach above this threshold may facilitate an increase towards Rs 271.8.