Natural gas concluded the trading session with an increase of 0.8% at Rs 277.4, even in the face of diminished LNG export flows. This uptick was bolstered by a reduction in domestic production and more favorable demand forecasts, which contributed positively to market sentiment. Gas flows to significant U.S. LNG export facilities have decreased from peak levels, attributed to seasonal maintenance activities at essential plants, such as Freeport LNG in Texas and Cameron LNG in Louisiana. In May, average gas flows to the nine principal U.S. LNG export terminals decreased to 17.0 bcfd, down from a peak of 18.8 bcfd in April.

This decline can be attributed, in part, to diminished operations at the Golden Pass and Freeport LNG facilities. Price support materialized following a continued decline in U.S. Lower 48 gas production. LSEG reported that average output has decreased to 109.2 bcfd thus far in May, a decline from 109.8 bcfd in April and significantly lower than the record high of 110.6 bcfd observed in December 2025. The daily output has declined to a preliminary 15-week low of 106.1 bcfd, attributed to reduced production levels in Pennsylvania and Arkansas. Numerous producers, such as EQT, have curtailed production in response to subdued spot prices, biding their time for more favorable market conditions.

Weather forecasts suggested that temperatures would largely remain close to normal until May 29, while LSEG anticipated that average gas demand, inclusive of exports, would hold steady at approximately 99.2 bcfd over the forthcoming two weeks. During the week ending May 8, U.S. utilities added 85 billion cubic feet of gas to storage, aligning closely with market expectations and approaching the five-year average build of 84 bcf. Total inventories increased to 2.290 trillion cubic feet, which is 6.5% higher than the seasonal average.

From a technical perspective, the market is experiencing short covering, evidenced by a 1.54% decline in open interest to 20,189, alongside a price increase of Rs 2.2. Natural gas is finding support at Rs 270.8; a decline below this level may lead prices to test the Rs 264.1 mark. Resistance is identified at Rs 281.6, and a breakout above this threshold may propel prices toward Rs 285.7.