Natural Gas Prices Gain on Strong Demand Forecasts

Natural Gas prices in India edged higher this week due to forecasts signaling stronger demand over the next two weeks. The gain came despite a slight decline in gas flows to some Gulf Coast LNG facilities, including Cheniere Energy's Sabine Pass, following Tropical Storm Edouard.

The average U.S. gas production has been rising, reaching 112.2 billion cubic feet per day in September so far. This is up from August's monthly high of 111.5 bcfd. Additionally, record output and mild spring weather have kept inventories above the five-year average since March.

However, average U.S. gas demand, including exports, is expected to decline from 112.5 bcfd this week to 109.4 bcfd next week, indicating some near-term moderation. The EIA also expects U.S. dry gas production to rise from 107.6 bcfd in 2025 to 111.2 bcfd in 2026 and 116.0 bcfd in 2027.

Technically, the market remains under short covering as open interest declined sharply by 20.2% to 36,182 contracts while prices gained ₹1.8, indicating position unwinding alongside the recovery.