Natural gas prices declined by 0.26% to close at Rs 306, influenced by ample supply, declining crude oil prices, and predictions of milder weather that are anticipated to restrict short-term cooling demand. Despite ongoing forecasts from meteorologists indicating above-normal temperatures throughout the United States until July 16, the projections lacked sufficient strength to alleviate apprehensions regarding ample inventories and strong production levels. According to LSEG, the average natural gas production in the U.S. is reported to be The Lower 48 states experienced a slight decline to 109.6 billion cubic feet per day in July, down from 110 bcfd in June.

Total demand, which encompasses exports, is anticipated to rise from 105.8 bcfd this week to 109.6 bcfd in the following week. LNG export activity continued to show resilience, as average gas flows to the nine major U.S. LNG export facilities increased to 17.8 bcfd in July, up from 17.3 bcfd in June. The U.S. Energy Information Administration reported that utilities injected 76 billion cubic feet of natural gas into storage during the latest week, broadly in line with market expectations and maintaining inventories approximately 5.7% above the seasonal average.

The build was markedly below the 96 bcf injection noted during the corresponding period last year, yet it was in proximity to the five-year average of 75 bcf. Looking ahead, the EIA anticipates that both U.S. natural gas production and consumption will achieve unprecedented levels over the next two years. Dry gas production is expected to reach 111 billion cubic feet per day in 2026 and 113.6 bcfd in 2027. Simultaneously, LNG exports are anticipated to grow to 17.2 bcfd in 2026 and 18.6 bcfd in 2027.

Technically, the market continues to experience fresh selling pressure, as evidenced by a 12.28% increase in open interest alongside declining prices, which suggests the establishment of new short positions. Natural gas exhibits immediate support at Rs 302.9, with subsequent support at Rs 299.8, while resistance is identified at Rs 308. A sustained move above this level could open the door for further gains toward Rs 310.