Natural gas prices experienced a decline of 2.1%, settling at Rs 252.1. This decrease is attributed to expectations of mild weather conditions, which are facilitating higher-than-normal storage injections. Softer seasonal demand has impacted sentiment, with projections suggesting that inventory levels may increase to approximately 8% above normal in the short term. Furthermore, anticipated demand in the U.S. The consumption levels in the Lower 48 states are projected to decline from 101.9 bcfd this week to 100.4 bcfd next week, indicating a decrease in demand requirements.
Nevertheless, the downside was constrained by the tightening supply dynamics and strong export demand. U.S. gas output has exhibited signs of moderation, averaging 110.1 bcfd in April thus far, which is slightly below the levels observed in March. Daily production has decreased by nearly 3.8 bcfd, reaching a 12-week low of 108.3 bcfd. Declining spot prices have led major producers to temporarily reduce production, offering a degree of underlying support. Concurrently, near-record liquefied natural gas exports persist as a stabilizing influence on the market.
Inventory data further underscored the narrative of oversupply. U.S. utilities injected 103 bcf of gas into storage for the week ended April 17, a figure that notably exceeded market expectations of 94 bcf. This injection also surpassed last year’s build of 77 bcf and the five-year average of 64 bcf. Total stockpiles increased to 2.063 trillion cubic feet, which is 7.4% higher than the levels from a year ago and 7.1% above the seasonal average. Looking ahead, the EIA anticipates that production will achieve record highs in 2026, whereas demand is projected to experience a slight moderation.
From a technical perspective, the market is experiencing renewed selling pressure, as evidenced by a 16.15% increase in open interest to 34,851, which suggests the establishment of new short positions. Immediate support is identified at Rs 249, with a breach below this level likely to test Rs 246. Resistance is observed at Rs 256, and a breach of this threshold may propel prices toward Rs 260.