Natural gas futures declined sharply on MCX, mirroring weakness in US markets as traders reacted to milder weather forecasts and easing heating demand expectations.
On MCX, natural gas futures were trading at Rs 259.5 per mmBtu, down Rs 8.8 or 3.28% as of 10:00 AM IST.
US natural gas hits five-month low
In the US, natural gas futures for March delivery on the New York Mercantile Exchange fell 2.3% to settle at $2.915 per mmBtu, their lowest close since September 26. The contract is in its second-to-last session as the front-month.
The decline followed updated weather forecasts calling for warmer-than-normal conditions across much of the country through March 11, reducing expectations for heating demand.
Waha prices remain negative
In the physical market, average prices at the Waha Hub in West Texas remained negative for a record 13 consecutive days, reflecting pipeline constraints that have trapped gas in the region.
Waha prices have averaged 62 cents per mmBtu so far this year, compared with $1.15 in 2025 and a five-year average of $2.88.
Supply rises, demand set to ease
Gas output in the Lower 48 states climbed to 108.7 billion cubic feet per day (bcfd) in February, up from 106.3 bcfd in January. Production hit a monthly record of 109.7 bcfd in December.
According to LSEG projections, total demand, including exports, is expected to fall from 138.3 bcfd this week to 128.4 bcfd next week.
Storage levels are also improving. The deficit versus normal levels is expected to narrow to just 1% below average for the week ended February 20 after relatively mild weather reduced heating consumption.
LNG exports provide support
On the supportive side, US LNG export flows rose to 18.7 bcfd so far in February, on track to exceed December’s record. QatarEnergy and Exxon Mobil’s 2.4-bcfd Golden Pass export plant in Texas is also ramping up feedgas intake ahead of first LNG production.
Globally, gas prices remain elevated, with European TTF and Asian JKM benchmarks trading near $11 per mmBtu, reflecting strong international demand.
Despite strong LNG exports, the near-term focus remains on warmer US weather and expected lower domestic demand, keeping pressure on natural gas futures both in the US and on MCX.
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