Natural Gas
Natural gas futures declined to Rs 187 per mmBtu on April 8 as participants increased their short positions as seen by the open interest. Natural gas price had risen 2.6 percent yesterday on the NYMEX.
The energy commodity traded in the negative territory after a gap-down start in the afternoon session tracking weak global cues.
The commodity has been trading lower than 5, 20, 50, 100 and 200 days’ moving averages on a daily chart. The Relative Strength Index (RSI) is at 44.44 which indicates bearish momentum in the prices.
Market players await US EIA weekly natural gas inventory data to be released later in the day. The expectation is for a build of 21 billion cubic feet (Bcf) increase in stocks as against a 5-year average increase of 8 Bcf for this time of the year.
As per Bespoke Weather Service, colder air is expected to arrive next week, first into the middle of the nation, then spreading into East and South later next week into the start of the following week.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have started flat this Thursday morning and turn weak in the early afternoon in Asian trade, as traders await inventory data. Technically, NYMEX Natural Gas could trade in a range of $ 2.35-2.65 levels.”
“Technically, MCX Natural Gas Apil hold support at Rs 187-185 levels whereas resistances are at Rs 190 and 194”, Iyer added.
MCX iCOMDEX Natural Gas Index was down 25.91 points or 1.06 percent to 2,422.97.
In the futures market, natural gas for April delivery touched an intraday high of Rs 187.80 and an intraday low of Rs 184.90 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 slipped Rs 2, or 1.06 percent, to Rs 187 per mmBtu at 14:39 hours IST with a business turnover of 13,433 lots.
Natural gas delivery for May fell Rs 1.40, or 0.72 percent, to Rs 193.50 per mmBtu with a business volume of 2,449 lots.
The value of April and May’s contracts traded so far is Rs 878.88 crore and Rs 43.61 crore, respectively.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “Natural gas markets have rallied on Wednesday to show signs of life again, but quite frankly there is a significant amount of resistance. Support for the natural gas is at Rs 183 levels below it may go towards Rs 180 levels. Resistance for the energy is at Rs 190 level.”
Natural gas may remain under pressure ahead of inventory report however a sharp decline may come only if the stock buildup is much higher than market expectations.
At 09:12 (GMT), the natural gas price dropped 1.07 percent quoting at $ 2.49 per mmBtu in New York.
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