Natural Gas prices concluded the session with a 0.69% increase, reaching Rs 262.8. This uptick can be attributed to short covering following recent declines, even as the market continues to face challenges from record production levels in the US, reduced LNG export flows, and ample storage capacity. Financial firm LSEG reported that average dry gas output in the US Lower 48 states has reached 110.6 billion cubic feet per day so far in July, matching the record monthly high recorded in December 2025.

While abundant supply continues to exert pressure on sentiment, projections for above-normal temperatures through mid-August are anticipated to sustain elevated electricity demand, thereby bolstering natural gas consumption for power generation. LSEG estimates that total US petrol demand, encompassing exports, will rise from 110.6 bcfd this week to 112.7 bcfd next week. Supply fundamentals exhibited a mixed performance as average gas flows to the nine major US LNG export plants declined to 17.2 bcfd in July, down from 17.4 bcfd in June, primarily attributable to maintenance activities at Freeport LNG in Texas.

Meanwhile, the US Energy Information Administration reported a storage injection of 32 billion cubic feet for the week ended July 17, which was slightly below 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 observed a year ago, yet remains 6.4% higher than the five-year seasonal average, suggesting a favourable supply situation. The EIA also maintained a constructive long-term outlook, forecasting record US dry gas production of 111.2 bcfd and domestic consumption of 92.1 bcfd in 2026, while LNG exports are projected to rise to 17.4 bcfd.

Technically, the market is experiencing short covering, as evidenced by a 1.54% decline in open interest to 51,744 contracts, accompanied by a price increase of Rs 1.8. Natural Gas exhibits immediate support at Rs 258.6, with subsequent support at Rs 254.3. Resistance is identified at Rs 265.6. A sustained move above this level could extend gains towards Rs 268.3.