Natural gas prices rose 0.56 percent during the week ended May 21 to settle at Rs 217.60 per mmBtu on the MCX. The energy price jumped in two out of five trading sessions on the domestic bourse.
It has been trading higher than its 50, 100 and 200 days’ moving averages but lower than the 5 and 20 days’ moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 49.14, which indicates sideways movement in the prices.
The EIA reported that the US natural gas inventories increased by 71 billion cubic feet (Bcf) for the week ended May 14 as against market expectations of a 67 Bcf rise. Natural gas in storage was 2,100 Bcf as of May 14, 2021.
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US fell by 1 to 99 rigs for the week to May 21.
The expectations of higher US summer and strong global demand are likely to lend support and capped downside.
Kshitij Purohit, Product Manager, Currency and Commodities, CapitalVia Global Research Limited said, “Prices had a great start to the week, surging almost 5 percent as warmer than normal weather is forecast to cover the East coast of the United States for the next 8-14 days. MCX Natural Gas could see a sideways to marginal downside momentum in the coming week where Rs 219-221 levels will hold resistance and support is at Rs 205-201 levels”
MCX iCOMDEX Natural Gas Index was down 13.49 points or 0.50 percent to end at 2,672.92.
In the futures market, natural gas for June delivery touched an intraday high of Rs 223.10 and an intraday low of Rs 216.70 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 193 and a high of Rs 236.10.
Natural gas delivery for June slipped Rs 1.40, or 0.64 percent to settle at Rs 217.60 per mmBtu with a business turnover of 9,291 lots.
Natural gas delivery for July declined by Rs 1.20, or 0.54 percent to close at Rs 220.20 per mmBtu with a business volume of 752 lots.
The value of June and July’s contracts traded on May 21 was Rs 1,670.82 crore and Rs 42.68 crore, respectively.
Natural gas price settled with a loss of 0.57 percent at $ 2.97 per mmBtu in New York.
Strategy
“Traders should keep an eye on the sell-on-rise opportunity in MCX Natural gas futures from the resistance level around Rs 214.70–215.10. For this sell position, traders should keep a stop loss of around Rs 219 and aim the target at Rs 205.70 for the coming week,” Purohit said.
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