Natural gas prices concluded the trading session with an increase of 2.96%, reaching Rs 278.3. This rise was bolstered by heightened demand for cooling during the summer and anticipations of a storage injection that would be smaller than usual. However, the extent of the gains was limited by strong production levels in the US and ongoing concerns regarding oversupply. LSEG data indicated that average Lower 48 gas output has reached 111.5 billion cubic feet per day thus far in August, surpassing the July monthly record of 110.7 bcfd. Meanwhile, average gas flows to the nine major US LNG export plants were 17.1 bcfd in August, a slight decrease from 17.2 bcfd in July and the record high of 17.4 bcfd observed in June.

LSEG anticipates that average Lower 48 gas demand, inclusive of exports, will decrease slightly from 111.6 bcfd this week to 111.3 bcfd next week, indicating a constrained potential for near-term demand growth. US energy firms recorded an addition of merely 16 billion cubic feet of natural gas to storage for the week ending August 14. This figure fell short of market expectations, which anticipated an injection of 19 bcf, and was considerably lower than the five-year average injection of 29 bcf. Inventories increased to 3.169 trillion cubic feet, which is 0.9% lower than the level recorded last year, yet 6.2% higher than the five-year average. The most recent injection fell short of the 36 bcf increase noted in the prior week.

Looking ahead, the EIA anticipates that both US gas supply and demand will attain unprecedented levels by 2026. Dry gas production is anticipated to increase from 107.6 billion cubic feet per day in 2025 to 111.2 bcfd in 2026 and further to 116.0 bcfd in 2027. Concurrently, domestic consumption is expected to rise from 91.9 bcfd to 92.0 bcfd and then to 94.8 bcfd in the same years. LNG exports are projected to increase from 15.1 bcfd in 2025 to 17.4 bcfd in 2026 and further to 18.6 bcfd in 2027, despite a minor downward adjustment in the August forecast attributed to maintenance at Freeport LNG.

Technically, natural gas is experiencing short covering, as open interest has decreased by 17.82% to 35,241, while prices have risen by Rs 8. Immediate support is positioned at Rs 272.7, and a breach beneath this threshold could result in a decline to Rs 267.1. On the upside, resistance is observed at Rs 282, and a sustained movement above this threshold may propel prices toward Rs 285.7.