Natural gas prices experienced an increase of 3.52%, closing at Rs 282.5. This rise was bolstered by a reduction in daily US production and enhanced flows toward liquefied natural gas exports, despite the fact that overall supply continues to be high. LSEG data indicated that average Lower 48 gas output reached 113.0 billion cubic feet per day in September, an increase from the August monthly record of 112.2 bcfd. However, daily production is projected to decrease to an 11-week low of 109.8 bcfd, primarily due to reductions in Louisiana and North Dakota. US natural gas inventories rose by 44 billion cubic feet during the week ending September 11, falling short of market expectations of 49 bcf.

This figure also lags behind the 87 bcf build noted in the same week last year and the five-year average injection of 74 bcf. Working gas stocks reached 3.298 trillion cubic feet, approximately 3.6% lower than levels from a year ago, yet 3.7% higher than the five-year average. Hot summer weather has led to a rise in gas-fired power demand, with natural gas representing approximately 40% of US power generation. This has resulted in a decrease in the storage surplus, which fell from 7.7% above normal in April to an estimated 3.0% above normal by September 18.

The US Energy Information Administration anticipates an increase in dry gas production from 107.6 bcfd in 2025 to 111.2 bcfd in 2026, reaching 116.0 bcfd in 2027. Concurrently, domestic consumption is expected to be 92.0 bcfd in 2026 and 94.8 bcfd in 2027. LNG exports are projected to rise from 15.1 bcfd in 2025 to 17.4 bcfd in 2026 and further to 18.6 bcfd in 2027, bolstering demand even in light of maintenance-related modifications at Freeport LNG.

Technically, the market is experiencing short covering, as evidenced by a significant decline in open interest of 47.61%, bringing it down to 13,627 contracts, while prices have risen by Rs 9.6. Natural gas is currently experiencing support at Rs 273.8. A sustained breach below this threshold may lead to a reevaluation, potentially testing the Rs 265.1 mark. On the upside, resistance is positioned at Rs 287.4, and a decisive move above this level could propel prices toward Rs 292.3.