Natural gas futures drop over 2% on lower-than-expected decline in inventory

Natural gas futures trade weaker at Rs 187.50 per mmBtu on December 24. Natural gas price had declined 6.2 percent yesterday on the NYMEX.

Natural gas price had a negative open and extended slide to trade at a low point of the day in the afternoon session on lower than expected decline in inventory.

The US Energy Information Administration (EIA) reported that US natural gas inventories fell by 152 billion cubic feet (bcf) for the week ended December 18 against market expectations of 160 bcf.

Natural gas prices were weighed down by rising output and mixed weather forecast denting outlook for residential heating demand.

MCX iCOMDEX Natural Gas Index inched down 53.01 points, or 2.25 percent to 2,306.45.

Kshtij Purohit, Product Manager Currency & Commodities, CapitalVia Global Research Limited said, “Natural gas fail to cross Rs 210 levels which is also 50 days moving averages. Inventory data shows falling demand put pressure on the price. Short term support for the price is Rs 187 levels below which price may drag towards Rs 184 levels”, he added.

In the futures market, natural gas for December delivery touched an intraday high of Rs 192 and an intraday low of Rs 186.60 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 175.90 and a high of Rs 259.80.

Natural gas delivery for December eased Rs 4.40, or 2.29 percent, to Rs 187.50 per mmBtu at 14:28 hours IST with a business turnover of 6,325 lots.

Natural gas delivery for January slipped Rs 4, or 2.09 percent, to Rs 187.40 per mmBtu with a business volume of 5,169 lots.

The value of December and January’s contracts traded so far is Rs 756.47 crore and Rs 131.77 crore, respectively.

Natural gas prices fell sharply yesterday in reaction to inventory report and we may see some stability today however the general bias may be on the downside, said Kotak Securities.

At 09:01 (GMT), the natural gas price was down 2.13 percent quoting at $2.53 per mmBtu in New York.

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