Natural gas futures on April 1 edged higher to settle at Rs 194.10 per mmBtu as participants increased their long positions as seen by the open interest. It has risen by Rs 8.3 or 4.47 percent during the current week on the MCX.
The energy commodity has been trading higher than 5, 20 and 200 days’ moving averages but lower than the 50 and 100 days’ moving average on a daily chart for the April contract. The Relative Strength Index (RSI) is at 51.44 which indicates positive momentum in the prices.
The US Energy Information Administration (EIA) reported that US natural gas inventories rose by 14 billion cubic feet (Bcf) for the week ended March 26 against market expectation of a 21 Bcf decline. Natural gas in storage was 1,764 Bcf as of Friday, March 26, 2021.
The number of rigs drilling natural gas in the US fell by 1 to 91 rigs for the week to April 1, said energy services firm Baker Hughes in a weekly report.
Indian government kept the gas price for locally produced fields constant at $ 1.79/mmBtu and the ceiling price for gas produced from difficult fields has been decreased to $ 3.62/mmBtu from $ 4.06/mmBtu resulting in a net decline of 10.8 percent. The revised rate will be prevalent from April 1, 2021 to September 30, 2021.
Natural gas demand for the residential sector declined to 92.5 billion cubic feet (Bcf) per day compared to 96.8 Bcf in the preceding week, while the industrial sector was lower at 23 Bcf/d on a weekly basis, according to PointLogic Energy.
“Fundamentally for the weeks ahead, we are estimating MCX Natural Gas futures to trade bearish in expectancy of steady supplies, lower demand/usage and rise in inventories observed on a weekly basis,” said Sunand Subramaniam, Senior Research Associate, Choice Broking.
Subramaniam also said that the US CPC further expects warmer weather conditions for the next 6-10 days in this spring season which is expected to bring pressure in prices during the week ahead. Overall, we expect a bearish trend in MCX Natural Gas in the coming week, Subramaniam noted.
MCX iCOMDEX Natural Gas Index was up 40.17 points or 1.62 percent to end at 2,516.26.
In the futures market, natural gas for April delivery touched an intraday high of Rs 195.40 and an intraday low of Rs 189.60 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 179.80 and a high of Rs 223.
Natural gas delivery for April gained Rs 3, or 1.57 percent to settle at Rs 194.10 per mmBtu with a business turnover of 14,206 lots.
Natural gas delivery for May edged higher by Rs 3.10, or 1.58 percent, to close at Rs 199 per mmBtu with a business volume of 2,482 lots.
The value of April and May’s contracts traded on April 1 was Rs 4,725.87 crore and Rs 121.68 crore, respectively.
Natural gas price settled with a gain of 0.73 percent quoting at $ 2.62 per mmBtu in New York.
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