Natural gas settled 1.59% lower at Rs. 272.70 per mmBtu, as persistently mild weather forecasts and recovering domestic production exerted downward pressure on prices, overshadowing the support provided by robust LNG exports and decreasing storage inventories. Meteorologists anticipate that temperatures throughout a significant portion of the US will stay above the seasonal average during the initial half of November, which could restrict the demand for heating.
Meanwhile, Lower 48 natural gas production rebounded to an average of 113.3 bcfd over the past week, enhancing the availability of domestic supply. Average feedgas flows to nine major US LNG export terminals rose to 18.5 bcfd in October, up from 17.9 bcfd in September. US natural gas inventories rose by 80 bcf in the week ending October 23, surpassing market expectations of a 75 bcf injection, bringing total stocks to 3.724 trillion cubic feet. Inventories stood at 3.8% lower than the levels observed a year prior, yet they were 1% higher than the five-year average. Speculative positioning exhibited a decline, as net short positions rose by 48,615 contracts to reach 205,464, indicating a renewed bearish sentiment among traders.
The EIA projected that US dry gas production will increase to 112.2 bcfd in 2026 and 116.1 bcfd in 2027. Concurrently, domestic consumption is anticipated to rise to 92.4 bcfd and 93.8 bcfd in the same years, respectively. LNG exports are projected to attain 17.6 bcfd in 2026 and 18.6 bcfd in 2027. However, expectations of stronger supply growth have heightened concerns regarding the stability of the domestic market. Goldman Sachs has revised its 2027 NYMEX natural gas price forecast downward to $2.80 per mmBtu, a decrease from the previous estimate of $3.50. This adjustment is attributed to increasing production in the Permian Basin and a supply growth that surpasses demand growth by over 2 bcfd.
Technically, the market is experiencing new selling pressure, with open interest rising by 2.42% to 57,905 contracts, accompanied by a price decrease of Rs. 4.40. Natural gas is presently encountering support at Rs. 268.50, with an additional level of support at Rs. 264.00, while resistance is established at Rs. 280.50. A sustained move above this resistance could trigger a recovery toward Rs. 288.00, whereas a break below immediate support may extend the downside momentum.
