Natural Gas Dips on Rising Output and Mild Weather

Natural gas prices in India saw a slight decline of 0.96%, settling at ₹287.5. This drop was driven by rising production levels and mild weather conditions, which are expected to keep energy demand subdued. The US Energy Information Administration reported a 64 billion cubic feet (bcf) increase in storage for the week ended September 25, adding to concerns about ample supply levels.

US natural gas output averaged 113.3 bcf per day in September, matching the record high set in August. The surplus in inventories has remained above the five-year average since March, peaking at 7.7% above normal in April. While LNG export flows increased to 17.9 bcfd in September from 17.2 bcfd in August, they still fell short of the record 18.8 bcfd seen in April.

Storage levels rose by 53 bcf in the week ended September 18, aligning with analyst expectations but lagging behind the 77-bcf build recorded a year earlier and the five-year average of 76 bcf. Looking ahead, the EIA projects both supply and demand to reach record levels by 2026, with dry gas production expected to hit 111.2 bcfd and domestic consumption at 92.0 bcfd.

Technically, natural gas is under selling pressure, with open interest rising 16.11% to 54,157 while prices dropped ₹2.8. The market finds support near ₹284.5, with a break below this level potentially exposing ₹281.5. On the upside, resistance is near ₹291.3, and a sustained move above could push prices toward ₹295.1.