New Delhi, June 16 (IANS) 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

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