Natural Gas Prices Retreat Amid Record Production

Natural gas prices experienced a sharp 7.29% decline, settling at ₹258.2, as record-high production levels and expectations of milder weather weighed heavily on market sentiment. U.S. output from the Lower 48 states surged to a new peak of 108.0 billion cubic feet per day (bcfd) on April 18, surpassing the previous record of 107.5 bcfd. The monthly average for April now stands at 106.6 bcfd—up slightly from 106.2 bcfd in March—signaling steady supply growth.

Weather forecasts further pressured prices, with projections pointing to warmer-than-average conditions extending into early May. This reduced the anticipated demand for heating. According to LSEG, overall gas consumption, including exports, is expected to remain around 98.1 bcfd over the next two weeks, down from earlier projections.

 

Despite bearish short-term factors, storage levels remain relatively tight. U.S. utilities added just 16 billion cubic feet (bcf) to storage in the week ending April 11, significantly below the five-year average of 50 bcf for the same period. Inventories are currently 20.6% lower than last year.

 

Technically, natural gas is facing renewed selling pressure, reflected in a 22.73% jump in open interest to 27,065 contracts. Key support lies at ₹251.8, with a potential downside to ₹245.3, while resistance stands at ₹270. A move beyond that could push prices toward ₹281.7.

 

Natural gas futures also broke below significant technical levels, including the 200-day moving average, reaching a session low of $2.99. This price marks a crucial support zone defined by the completion of a falling ABCD pattern, the 61.8% Fibonacci retracement, and the January swing low. A drop beneath this level would signal a break in the larger uptrend structure.

 

Futures dropped over 5% to $3.0/MMBtu, the lowest since late January, as high output and mild weather reduced demand expectations. Nevertheless, LNG exports remain strong, hitting a record 16.1 bcfd this month—driven by increased capacity at a major export facility in Louisiana.

 

The broader market also reflects seasonal patterns and economic concerns. With heating needs fading and electricity usage potentially declining amid a slower U.S. economy, demand may stay subdued. Political uncertainty, particularly around President Trump’s shifting tariff policies, has also raised questions about global growth and energy consumption.

 

As natural gas prices trade below key technical thresholds, including the 200-day EMA, the outlook appears bearish. The $3.50 level remains a strong resistance zone, and unless the market can reclaim that territory, the downward pressure may persist. With limited upside potential in the current climate, traders are leaning toward short positions until clear signs of reversal emerge.