Natural gas futures dip 0.24% to Rs 205.40 per mmBtu

Natural gas futures were trading slightly lower at Rs 205.40 per mmBtu on March 1, with participants increasing their short positions as seen by the open interest. Natural gas price had fallen 2.19 percent last week on the MCX.

Despite positive global cues, natural gas traded in the red after a gap-down start in the afternoon session.

The commodity has been trading higher than 50, 100 and 200-day moving averages but lower than 5 and 20 moving averages on a daily chart. The Relative Strength Index (RSI) is at 48.17, indicating a neutral momentum.

The number of rigs drilling natural gas in the US jumped by 1 to 92 for the week ended February 26, said Baker Hughes in a weekly report.

Natural gas output increased 32 million cubic feet per day in December after rising 2,968 million the previous month, according to the US Energy Information Agency (EIA) production report.

The weather, which has placed downward pressure on prices, is expected to stay mild across the mid-west and the east coast.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have started higher this Monday morning and early afternoon in Asian trade. Technically, NYMEX natural gas could trade in a range of $2.60-2.95 levels.”

MCX iCOMDEX Natural Gas Index was down 6.59 points or 0.24 percent to 2,706.07.

In the futures market, natural gas for March delivery touched an intraday high of Rs 206.60 and an intraday low of Rs 204.30 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 175 and a high of Rs 222.20.

Natural gas delivery for February fell Rs 0.50, or 0.24 percent, to Rs 205.40 per mmBtu at 1431 hours, with a business turnover of 10,303 lots.

The delivery for April declined Rs 0.50, or 0.24 percent, to Rs 208.30 per mmBtu with a business volume of 2,414 lots.

The value of March and April’s contracts traded so far is Rs 621.73 crore and Rs 25.86 crore, respectively.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “For the coming week, traders must keep an approach of buy-on-dips in MCX natural gas. We are anticipating the ideal buy range should be around Rs 197-198, following the target of Rs 220 by maintaining stop loss at Rs 188.”

At 0907 GMT, the natural gas price edged higher 0.72 percent quoting at $2.79 per mmBtu in New York.

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