Natural gas declined 4.62% to settle at Rs 264.5, reflecting the overall downturn in global energy markets following a reduction in geopolitical tensions in the Middle East. Prices experienced downward pressure following Iran’s announcement of a cessation of retaliatory attacks in light of the suspension of US military strikes, which alleviated concerns regarding potential disruptions to regional energy supplies. Additional downside pressure has arisen due to favourable US supply conditions and a decline in LNG export demand. Gas flows to major US LNG export terminals averaged 17.2 bcfd in July, a slight decrease from 17.4 bcfd in June, attributed to scheduled maintenance at the Freeport LNG facility.

However, losses were partially constrained as weather forecasts persisted in indicating above-normal temperatures through 8 August, bolstering demand for gas-fired power generation to satisfy cooling needs. Fundamentally, the US Energy Information Administration reported a storage injection of 32 billion cubic feet for the week ended 17 July, which fell slightly short of market expectations of 35 bcf. Total working gas in storage rose to 3.056 trillion cubic feet, which is 0.5% lower than the levels recorded a year ago, yet 6.4% higher than the five-year seasonal average, indicating a relatively comfortable supply situation.

Meanwhile, average dry gas production in the Lower 48 states increased to 110.4 bcfd in July, up from 110.0 bcfd in June. The EIA has projected that US natural gas production and demand will achieve record levels in the upcoming years, with production anticipated to reach 111.2 bcfd in 2026 and 115.3 bcfd in 2027. Additionally, LNG exports are expected to rise from 15.1 bcfd in 2025 to 17.4 bcfd in 2026.

Technically, natural gas is experiencing long liquidation, as evidenced by a 43.79% decline in open interest to 7,033 lots, indicating a trend of aggressive profit booking. Immediate support is identified at Rs 260.5, with subsequent support at Rs 256.6, while resistance is established at Rs 269.9. A sustained move above this level could extend gains towards Rs 275.4, whereas failure to hold support may invite further downside pressure.