Natural gas futures rose on September 8 as participants raised their bullish bets as seen by the open interest. The gas prices had fallen 3.1 percent yesterday on the NYMEX.
The energy commodity has traded in the positive territory since morning, tracking the bullish overseas cues.
On the MCX, natural gas delivery for September jumped Rs 3.40, or 1.01 percent to Rs 339.70 per mmBtu at 14:27 hours with a business turnover of 14,161 lots.
Gas delivery for October surged Rs 3, or 0.88 percent, to Rs 343.60 per mmBtu with a business volume of 4,859 lots.
The value of September and October's contracts traded so far is Rs 508.64 crore and Rs 44.36 crore, respectively.
MCX iCOMDEX Natural Gas Index climbed 43.77 points or 1.07 percent to 4,132.87.
Kotak Securities said natural gas rallied sharply in the last few days and lack of fresh triggers made it vulnerable to some profit-taking however we still do not expect a sustained decline amid tightening US market and slow production recovery. The focus may continue to be on the US weather, a trend in energy prices and storm activity in the Atlantic.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “Natural gas market has been parabolic for a long time, and as a result, it is likely that we will continue to see buyers beneath on dips, which is critical for the trend to continue.”
“The $4.80 level has provided some resistance, although this is more due to being overbought than anything else. If we break down from here, the $4.50-4.40 levels will provide some support”, Purohit added.
The gas price has been supported by tightness in the US markets amid a lesser than average buildup in inventory.
About 77.89 percent of the Gulf of Mexico gas production remained shut as of September 7 against 80.78 percent a day earlier, as per the US Bureau of Safety and Environmental Enforcement.
Technicals
The commodity has been trading higher than 20, 50, 100, and 200 days' moving averages but lower than the 5-day moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 69.48, which indicates a buy in the price.
Geojit Financial Services said, “If unable to break Rs 345 expect corrective selling for the day. A direct rise above the same would take prices further highs.”
At 0914 GMT, the natural gas price was up 1.09 percent at $4.61 per mmBtu in New York.
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