Natural gas recovery accelerates as inventories fall and LNG exports rise: Report
New Delhi, June 16
Natural gas prices have recovered notably after a steep correction earlier in 2026 as inventory balances tighten, export activity rises and seasonal power demand picks up, according to a report.
The report from brokerage Motilal Oswal Financial Services Ltd said primary pricing benchmark Henry Hub prices, which fell from $7.72 per Million British Thermal Units (MMBtu) to $2.77 per MMBtu in April, have since moved back above $3 per MMBtu level, aided by lower‑than‑expected storage injections, stronger power‑sector consumption and continued expansion of US liquefied natural gas export infrastructure.
Recent inventory data point to a gradual market rebalancing, with storage additions below expectations for three consecutive weeks, while the year‑on‑year surplus contracted substantially from April levels, it said.
The data indicated that supply overhang concerns have eased considerably in recent months. European storage trends indicate a gradual tightening in gas market balances.
Warmer weather across key regions has also lifted electricity usage, resulting in higher gas consumption by power generators.
As cooling requirements increase during the summer months, utilities are drawing more fuel to meet rising energy needs.
Growing US LNG capacity is expected to raise export volumes in 2026 as new facilities ramp up operations and additional liquefaction trains come online. The growing linkage between domestic production and overseas markets is expected to play a larger role in balancing supply.
Global market conditions remain constructive, the report said, adding that price premiums in Europe and Asia continue to encourage US cargoes, while ongoing disruptions to international trade routes have reinforced the attractiveness of American LNG in overseas markets.
"Emerging requirements from data centres are creating an additional source of consumption. Collectively, these factors are contributing to a more favourable medium-term environment for the commodity," said Navneet Damani, Head of Research - Commodities, Motilal Oswal Financial Services Ltd.
— IANS
Reader Comments
Interesting how US LNG exports are affecting global markets. As someone who works in energy policy, I think India should accelerate its own gas production and pipeline infrastructure to reduce import dependency. We can't keep being at the mercy of global price swings.
As a housewife in Bengaluru, I don't understand all this technical jargon. But I do know my cooking gas cylinder price went up last month. Hope this report means it won't go up further. Our household budget is already stretched with rising vegetable prices. 😞
The data center angle is interesting. With all the AI hype, power demand from data centers is definitely going to be a factor going forward. But from an Indian perspective, we need to prioritise our domestic gas for power generation and city gas distribution, not export it.
Hmm, the report says global conditions are "constructive" but we all know how volatile energy markets can be. Especially with those trade route disruptions and geopolitical tensions. India should also invest more in renewables to reduce our overall fossil fuel exposure. Just my two paise. 💡
Good analysis from Motilal Oswal. I track Henry Hub prices for my work, and the recovery above $3 is notable. But I'm a bit skeptical about how strong the demand from data centers really is in this cycle. Might be overhyped. Still, good for Indian gas producers like ONGC and GAIL in the short term.
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