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Natural gas futures down 0.70% to Rs 183.10 per mmBtu ahead of inventory report

The commodity has been trading lower than 5, 20, 50 and 100 days' moving averages but higher than the 200-day moving average on a daily chart.

Mumbai / March 18, 2021 / 02:59 PM IST
The gas price has recovered from January lows set earlier this week but came under pressure again amid positioning for the weekly inventory report.

The gas price has recovered from January lows set earlier this week but came under pressure again amid positioning for the weekly inventory report.

Natural gas futures eased to Rs 183.10 per mmBtu on March 18 as participants increased their short positions as seen by the open interest. Natural gas price had fallen 1.3 percent yesterday on the NYMEX.

The energy commodity pared losses in the afternoon trade after a gap-down start tracking muted global trend.

The commodity has been trading lower than 5, 20, 50 and 100 days' moving averages but higher than the 200-day moving average on a daily chart. The Relative Strength Index (RSI) is at 35.64 which indicates bearish momentum in prices.

Kotak Securities said natural gas may remain under pressure ahead of the inventory report however a sharp decline is unlikely unless EIA reports a much smaller withdrawal from storage. Apart from the inventory report, focus will also be on US weather and trends in energy prices.

The gas price has recovered from January lows set earlier this week but came under pressure again amid positioning for the weekly inventory report.

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Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “Natural gas traded sideways during the last trading day. The weather is expected to be warmer than normal throughout most of the east coast and the midwest for the next 8-14 days. This should weigh on heating demand. Natural gas has support at Rs 179 levels below it may come down Rs 175 levels whereas the resistance for the energy is at Rs 189.

MCX iCOMDEX Natural Gas Index was down 23.33 points or 0.96 percent to 2,406.12.

In the futures market, natural gas for March delivery touched an intraday high of Rs 183.50 and an intraday low of Rs 181.90 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 March slipped Rs 1.30, or 0.70 percent, to Rs 183.10 per mmBtu at 14:33 hours IST with a business turnover of 11,240 lots.

Natural gas delivery for April declined Rs 1.80, or 0.96 percent, to Rs 185.70 per mmBtu with a business volume of 2,497 lots.

The value of March and April’s contracts traded so far is Rs 376.88 crore and Rs 28.49 crore, respectively.

Axis Securities said on the daily chart prices has formed a hammer candlestick pattern near the bottom of the trend indicating a possible reversal from the current downtrend.

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The brokerage said any dips towards Rs 182 should be used as a buying opportunity in Natural gas for a target of Rs 186 level on intraday basis.

At 09:06 (GMT), the natural gas price fell 0.55 percent quoting at $2.5` 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
first published: Mar 18, 2021 02:59 pm

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