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Natural gas prices surged by an impressive 6.19% to settle at 265.8, primarily due to ongoing concerns about dwindling supply. In recent data from the EIA, US utilities added 86 billion cubic feet of gas to storage in the last week of September, which was slower than the prior week and missed market expectations. This highlighted the strain on available supply, especially as average output in the lower 48 states dipped in October.
Adding to the bullish sentiment was the upcoming launch of the New Fortress Energy LNG export plant, raising hopes for foreign sales and consequently reducing domestic supply. However, the total volume of supplied to major US LNG export plants remained relatively steady in October, falling short of previous record levels. On the weather front, meteorologists predicted near-normal conditions in the lower 48 states through October 20th. Furthermore, LSEG forecasted an increase in US gas demand, including exports, as seasonal cooling boosts heating demand.
From a technical perspective, the market witnessed fresh buying, with open interest increasing by 22.53% to 25665, while prices rose by 15.5 rupees. Natural gas is currently supported at 253.2, with the possibility of testing 240.6 levels if it falls below this point. Resistance is expected at 272.6, and a breakthrough could lead to testing 279.4 levels.
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