Natural gas prices concluded the session with a slight increase, rising 0.27% to settle at Rs 297.5, bolstered by enhanced demand forecasts and indications of more robust seasonal usage. Market sentiment remained positive as forecasts indicated above-normal temperatures across a significant portion of the United States through late June, which is expected to elevate cooling demand and enhance gas consumption by power generators. With almost 40% of electricity in the U.S. produced by natural gas-fired plants, the anticipated warmer weather is likely to drive increased fuel consumption as air-conditioning demand escalates as we approach early July.

Fundamental indicators showed a varied landscape. According to LSEG, the average natural gas production in the U.S. In June, the Lower 48 states experienced a decrease in natural gas production, easing to 109.0 billion cubic feet per day from 109.7 bcfd in May, indicating a slight slowdown in output. Simultaneously, total petrol demand, encompassing exports, is anticipated to rise from 102.9 bcfd this week to 104.3 bcfd next week, underscoring positive consumption trends. LNG export activity continues to show resilience, even with seasonal maintenance efforts underway. Average flows to key U.S. export facilities have reached 16.5 bcfd in June, slightly down from 17.1 bcfd in May.

The U.S. Energy Information Administration reported a storage injection of 108 billion cubic feet for the week ended June 5, surpassing market expectations of 99 bcf and staying above the five-year average build of 95 bcf. Looking ahead, the EIA anticipates that both natural gas production and demand will achieve record levels over the next two years. U.S. dry gas production is anticipated to increase to 111.0 bcfd in 2026 and further to 113.6 bcfd in 2027.

Meanwhile, LNG exports are expected to grow consistently, reaching 18.6 bcfd by 2027. Technically, the market is experiencing new buying activity, as open interest has increased by 2.45% to reach 19,604 contracts, accompanied by a slight rise in prices. Natural gas has immediate support at Rs 289.8, followed by Rs 282.0. Resistance is identified at Rs 301.8, and a breakout above this threshold may lead to further gains towards Rs 306.0.