Natural gas prices concluded the trading session with a slight decline of 0.45% at Rs 290.1, influenced by greater-than-anticipated storage injections and predictions of more temperate weather patterns throughout the United States. Market sentiment deteriorated following the report from the U.S. Energy Information Administration, which indicated a storage build of 101 billion cubic feet. This figure surpassed market expectations and suggested a comfortable supply availability. Weather forecasts indicating cooler temperatures throughout the Memorial Day holiday weekend and into the following week are anticipated to diminish cooling demand, following the atypically warm conditions experienced earlier this week.
Additional pressure arose from diminished LNG export activity, as gas flows to significant US liquefied natural gas export terminals decreased from a peak of 18.8 bcfd in April to approximately 17.0 bcfd in May, attributed to seasonal maintenance at facilities such as Golden Pass and Freeport LNG. However, reports indicate that three US LNG cargoes are set to arrive in China in June, marking the first shipments since February 2025, which has bolstered expectations for export demand.
Fundamentally, US natural gas inventories persist at elevated levels. Total stockpiles rose to 2.290 trillion cubic feet, reflecting a 2.3% increase compared to the previous year and a 6.5% rise above the five-year seasonal average. The EIA projected that US dry gas production will rise to record highs of 110.6 bcfd in 2026 and 115.0 bcfd in 2027, primarily driven by increased output from the Permian and Haynesville regions. Meanwhile, Goldman Sachs emphasised the increasing sensitivity of production to prices exceeding $3 per mmbtu, which may impact future supply dynamics.
Technically, the market is experiencing long liquidation, evidenced by a significant decline in open interest of 22.9% to 12,420 lots, accompanied by a price decrease of 1.3 rupees. Natural gas is maintaining support at Rs 287.1, with a probable decline towards Rs 284.1, while resistance is identified at Rs 294.3 and Rs 298.5 levels.