Natural gas settled down 3.73% at Rs 302.2, influenced by profit booking after the recent rally spurred by supply disruptions in the Gulf of Mexico due to Hurricane Isaias. Producers have curtailed approximately 1.3 billion cubic feet per day, which constitutes 59% of offshore Gulf output. However, the overall effect on US supplies has been minimal, as offshore production represented only 2% of total marketed gas production in 2025. Prices encountered heightened pressure following the Energy Information Administration’s report of a weekly storage injection of 85 billion cubic feet for the week ending October 2, 2026. This figure surpassed market expectations of 79 billion cubic feet and represented the most significant increase since late June.
Total inventories increased to 3.500 trillion cubic feet, which is 3.6% lower than the levels recorded a year ago. In October, US liquefied natural gas feedgas flows averaged 17.1 billion cubic feet per day, a decrease from the 18.0 billion cubic feet per day recorded in September. This decline is attributed to a delayed restart at Freeport LNG and scheduled maintenance at Cove Point. However, robust demand from European and Asian buyers persisted, bolstering the longer-term outlook despite the risks associated with Middle Eastern supplies.
Speculative net short positions across four major NYMEX and ICE natural gas contracts have risen by 30,679 contracts to reach a total of 111,835, reflecting an increase in bearish sentiment. The EIA projected that US dry natural gas production would rise from 107.6 billion cubic feet per day in 2025 to 112.2 billion in 2026, and further to 116.1 billion in 2027. Domestic consumption is projected to increase from 91.9 billion cubic feet per day in 2025 to 92.4 billion in 2026 and further to 93.8 billion in 2027. Meanwhile, average US liquefied natural gas exports are projected to rise from 15.1 billion cubic feet per day in 2025 to 17.6 billion in 2026 and further to 18.6 billion in 2027.
Natural gas is currently experiencing renewed selling pressure, as evidenced by a 17.83% increase in open interest to 34,760 contracts, alongside a price decline of Rs 11.7. Immediate support is positioned at Rs 296.3, with subsequent support at Rs 290.5, while resistance is identified at Rs 308.9. A sustained move above resistance could propel prices toward Rs 315.7, while a breach below support may amplify the bearish momentum.
