Natural gas futures on MCX jumped nearly 9% on Friday, tracking a sharp rally in global markets after March NYMEX natural gas (NGH26) closed up 11.13%. The rally comes after prices had already hit multi-year highs earlier in the week amid extreme weather conditions in the United States.
Global natural gas prices found strong support after the latest weekly EIA inventory report showed a larger-than-expected drawdown in storage. U.S. gas inventories fell by 242 billion cubic feet for the week ended January 23, exceeding market expectations and the five-year average draw, signalling tighter near-term supply-demand dynamics.
Prices have also surged due to an intense Arctic cold blast sweeping across large parts of the U.S., sharply increasing heating demand. The extreme cold caused freeze-offs at gas wells and disrupted production, temporarily knocking out nearly 50 billion cubic feet per day, or around 15% of total U.S. natural gas output. While some production has begun to return, demand remains elevated.
Additional support came from weather forecasts indicating below-normal temperatures persisting across the Upper Midwest, Mid-Atlantic, and Northeast regions in early February. Meanwhile, U.S. gas demand rose sharply, even as production outlooks remain cautious following downward revisions to 2026 output forecasts.
The strong global rally has spilled over into Indian markets, lifting MCX natural gas prices sharply as traders reacted to supply risks, weather-driven demand, and tighter inventory data.
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