Natural gas prices concluded the session with a 0.14% increase, reaching Rs 279.6. This uptick was bolstered by optimistic demand projections for the upcoming week and increased inflows to US LNG export facilities. However, the extent of the gains was limited by unprecedented production levels and adequate storage capacities. US Lower 48 gas output averaged 113.2 billion cubic feet per day in September, an increase from the monthly record of 112.2 bcfd in August. Meanwhile, mild weather has maintained inventories above the five-year average since March.

Storage increased by 44 bcf in the week ended September 11, falling short of market expectations of 49 bcf and markedly lower than the 87 bcf build recorded during the same week last year, as well as the five-year average injection of 74 bcf. Total working gas stocks increased to 3.298 trillion cubic feet, approximately 3.6% lower than the previous year, yet 3.7% higher than the five-year average. Average flows to nine major US LNG export plants rose to 18.1 bcfd in September, up from 17.2 bcfd in August, yet they continued to fall short of the record 18.8 bcfd achieved in April.

LSEG anticipates a decrease in US petrol demand, encompassing exports, from 109.8 bcfd this week to 108.1 bcfd next week, and further to 105.4 bcfd in two weeks. This projection occurs against a backdrop of warmer-than-normal weather expected to persist through October 3. The EIA anticipates an increase in US 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 expected 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.

From a technical perspective, natural gas is experiencing short covering, as evidenced by a 17.75% decline in open interest to 23,655 contracts, while prices increased by Rs 0.4. This suggests a process of position unwinding in conjunction with the price rise. Support is identified around Rs 274.6, with a potential decline below this level testing Rs 269.7. Conversely, resistance is observed near Rs 283.5; a consistent movement above this threshold may drive prices toward Rs 287.5.