Natural gas settled 0.65% higher at Rs 279, buoyed by forecasts indicating stronger demand over the next two weeks. The weather is anticipated to remain hotter than normal at least until mid-September, providing additional support for prices. The gain occurred notwithstanding a minor reduction in gas flows to certain Gulf Coast LNG facilities, including Cheniere Energy’s Sabine Pass, in the aftermath of Tropical Storm Edouard. In September to date, gas production in the contiguous United States has averaged 112.2 billion cubic feet per day, an increase from August’s peak of 111.5 bcfd.

This rise in output, coupled with mild spring weather, has ensured that inventories have remained above the five-year average since March. Average U.S. petrol demand, including exports, is projected to decrease from 112.5 bcfd this week to 109.4 bcfd next week, suggesting a trend of near-term moderation. U.S. energy firms recorded an addition of 15 billion cubic feet to storage for the week ending August 21. This figure fell short of expectations, which were set at 20 bcf, as well as last year’s injection of 17 bcf and the five-year average of 33 bcf.

Total inventories reached 3.184 trillion cubic feet, approximately 0.9% lower than the levels observed a year ago, yet remaining 5.5% above the five-year average. The EIA anticipates an increase in U.S. dry gas production, forecasting a rise from 107.6 bcfd in 2025 to 111.2 bcfd in 2026, and further to 116.0 bcfd in 2027. Concurrently, domestic consumption is projected to reach 92.0 bcfd in 2026 and 94.8 bcfd in 2027. LNG exports are projected to rise to 17.4 bcfd in 2026 and 18.6 bcfd in 2027, with the 2026 estimate experiencing a minor downward adjustment attributed to maintenance activities at Freeport LNG.

Technically, the market continues to experience short covering, evidenced by a significant decline in open interest of 20.2% to 36,182 contracts, while prices increased by Rs 1.8. This suggests a process of position unwinding in conjunction with the observed recovery. Immediate support is positioned at Rs 276.8, and a breach beneath this threshold may direct prices toward Rs 274.5. On the upside, resistance is observed at Rs 281.8, and a sustained movement above this threshold could propel prices toward Rs 284.5.