After prices surged due to supply problems in West Virginia and TC Energy’s Columbia Gas Transmission pipeline in Appalachia declared force majeure due to an unforeseen mechanical fault, natural gas finished sharply down by 4.52% at Rs 310.6 as profit booking surfaced. The disruption prompted the most significant single-day increase in US natural gas prices since January; however, the ensuing recovery in supply expectations led to a wave of selling. LSEG data indicated that average US Lower 48 gas production reached 112.5 billion cubic feet per day in September, surpassing the August monthly record of 112.3 bcfd.

However, daily output is projected to decrease toward an eight-month low of 106.9 bcfd, primarily due to production losses in West Virginia and Texas. Robust production coupled with temperate spring weather has maintained inventories above the five-year average, with levels reaching 7.7% above normal in April. However, heightened summer power demand has diminished this surplus, as gas-fired generation effectively addressed cooling needs. The EIA reported a 53 bcf storage injection for the week ended September 18, aligning with market expectations yet falling short of the 77 bcf build recorded during the corresponding week last year and the five-year average of 76 bcf.

The EIA anticipates an increase in US dry gas production, projecting it to grow from 107.6 billion cubic feet per day in 2025 to 111.2 billion cubic feet per day in 2026, and further to 116.0 billion cubic feet per day in 2027. Domestic consumption is anticipated to reach 92.0 bcfd in 2026 and 94.8 bcfd in 2027, whereas LNG exports are expected to rise to 17.4 bcfd in 2026 and 18.6 bcfd in 2027.

Technically, the market is experiencing long liquidation, as evidenced by a significant decline in open interest of 22.84% to 26,086 contracts, accompanied by a price drop of Rs 14.7, which suggests considerable unwinding of long positions. Natural gas is presently encountering support around Rs 303.9, and a breach beneath this threshold may lead to further declines toward Rs 297.2. On the upside, resistance is positioned around Rs 318.2, and a sustained movement above this threshold may initiate a recovery toward Rs 325.8.