Natural gas prices rose by 1.93% to settle at ₹179.6, driven by a smaller-than-expected storage build for this time of year. However, the upside was limited due to forecasts predicting less hot weather and lower demand in the coming weeks. Gas output in the Lower 48 states averaged 103.4 bcfd so far in August, matching July's levels but still below the record high of 105.5 bcfd set in December 2023. Despite the recent price recovery, major U.S. natural gas producers are preparing to further curtail production in the second half of 2024, responding to a nearly 40% price decline over the past two months. The U.S. EIA also revised its forecast, predicting a larger drop in natural gas output this year compared to previous estimates.
The EIA now expects U.S. natural gas output to average 103.3 bcfd in 2024, slightly down from the previous forecast of 103.5 bcfd. Meanwhile, gas consumption is projected to average 89.8 bcfd this year, up from the prior estimate of 89.4 bcfd. For 2025, production is forecasted to be slightly lower at 104.6 bcfd, with consumption remaining steady at around 89.2 bcfd. U.S. utilities added 21 Bcf of gas into storage during the week ending August 2, 2024, bringing total stockpiles to 3,270 Bcf, which is 248 Bcf higher than last year and 424 Bcf above the five-year average.
Technically, natural gas saw short covering, with open interest dropping by 3.55% to settle at 43,670 contracts while prices increased by ₹3.4. Support is currently at ₹172.6, with a potential test of ₹165.7. Resistance is seen at ₹184.9, with a move above this level potentially pushing prices to ₹190.3.