Natural gas prices increased by 2.97% to close at Rs 312, bolstered by short covering amid heightened liquefied natural gas export demand and anticipations of unprecedented electricity consumption, which enhanced market sentiment. A severe heat wave across the United States has led to a notable surge in air-conditioning demand, as temperatures in New York City are projected to hit 100°F, possibly equalling a record established in 1966. Weather forecasts suggesting elevated temperatures through mid-July are anticipated to sustain high levels of gas-fired power generation, given that natural gas constitutes nearly 40% of electricity production in the United States.
Moreover, average gas flows to significant LNG export terminals rose to 17.4 billion cubic feet per day during June. Fundamental indicators continued to exhibit broad support, even in the face of robust supply growth. Production in the Lower 48 states rose to an average of 110.0 billion cubic feet per day in June, up from 109.7 billion cubic feet per day in May. Meanwhile, the U.S. Energy Information Administration reported a storage injection of 76 billion cubic feet for the week ending June 19, which closely aligned with market expectations and maintained inventories approximately 5.7% above the seasonal average.
The EIA has projected that U.S. natural gas production and demand will achieve record levels in the forthcoming two years. Specifically, production is anticipated to reach 111.0 bcfd in 2026 and 113.6 bcfd in 2027. Concurrently, domestic consumption is expected to increase to 92.1 bcfd in 2026 and 95.0 bcfd in 2027. LNG exports are anticipated to rise to 17.2 bcfd in 2026 and 18.6 bcfd in 2027, thereby strengthening long-term demand projections.
From a technical perspective, natural gas is experiencing short covering, as open interest has decreased by 6.88% to 21,869 contracts while prices have risen. Immediate support is identified at Rs 302.8, with subsequent support at Rs 293.7, while resistance is established at Rs 318.2. A sustained move above this level could extend gains toward Rs 324.5.