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Natural gas futures cool off after hitting a four-month high

Technically, NYMEX Natural Gas could trade in a range of $3.05--3.250 levels.

Mumbai / June 09, 2021 / 03:00 PM IST
The gas prices rallied to the highest level in four months on a forecast of warmer weather that will boost cooling demand.

The gas prices rallied to the highest level in four months on a forecast of warmer weather that will boost cooling demand.

Natural gas futures edged lower to Rs 228.10 per mmBtu on June 9 as participants increased their short positions as seen by the open interest. The gas had risen 1.89 percent yesterday on the NYMEX.

The energy price traded in the red after a gap-down start on a weak global trend.

On the Multi-Commodity Exchange (MCX), natural gas delivery for June fell by Rs 1.20, or 0.52 percent, to Rs 228.10 per mmBtu at 14:34 hours with a business turnover of 21,260 lots.

Gas delivery for July slipped by Rs 1.30, or 0.56 percent, to Rs 229.50 per mmBtu with a business volume of 3,535 lots.

The value of June and July contracts traded so far is Rs 485.61 crore and Rs 53.03 crore, respectively. 

Close

MCX iCOMDEX Natural Gas Index declined 19.63 points or 0.70 percent to 2,793.13.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have started flat this Wednesday morning and turn marginally in red in the early afternoon Asian trade. Technically, NYMEX Natural Gas could trade in a range of $3.05--3.250 levels.”

On the domestic front, MCX Natural Gas June holds strong support near Rs 228- Rs 226 levels. Resistance is at Rs 231-Rs 233 levels, Iyer added.

“MCX Natural gas June is trading in sideways to marginally bearish momentum towards the support of Rs 225 in today’s session and sustains below the resistance of 15-SMA on an hourly chart placed near Rs 230.50,” said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited. 

The gas prices rallied to the highest level in four months on a forecast of warmer weather that will boost cooling demand.

However, weighing on the price is reduced LNG exports demand and an increase in US natural gas production.

US gas stocks are still in deficit despite a bigger than average buildup in the last few weeks while rig count has declined for four straight weeks.

Technicals

The commodity has been trading higher than 5, 20, 50, 100 and 200-days' simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 58.54, which suggests upbeat movement in the price.

At 09:18 GMT, the natural gas price was down 0.26 percent to quote at $3.12 per mmBtu in New York.

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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sandeep Sinha

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