Natural gas futures dropped to Rs 206.30 per mmBtu on February 24 as participants increased their short positions as seen by the open interest. The prices had fallen 2.7 percent yesterday on the NYMEX.
Natural gas traded in the red after a gap-down start in the afternoon session tracking muted global cues.
The commodity has been trading higher than 50, 100 and 200 days' moving averages but lower than 5 and 20 moving averages on a daily chart. The Relative Strength Index (RSI) is at 48 which indicates low momentum in prices.
The gas prices have corrected sharply from November 2020 highs as improved weather in the US has reduced heating demand and helped producers restart production.
Weather models also continued to favour a mostly mild pattern in the week ahead and weighed on prices.
Sriram Iyer, Senior Research Analyst at Reliance Securities, said: “International natural gas futures have started weaker this morning and early afternoon in Asian trade. Technically, NYMEX Natural Gas could trade in a range of $2.60-2.95 levels.”
“Technically, MCX March Natural Gas took resistance near Rs 213 levels and ended on a negative note and further downside below the level could see prices test Rs 205-202 levels soon whereas resistance is at Rs 211-214 levels,” Iyer noted.
MCX iCOMDEX Natural Gas Index fell 35.57 points or 1.29 percent to 2,717.93.
In the futures market, natural gas for March delivery touched an intraday high of Rs 208.20 and an intraday low of Rs 204.10 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 2.70, or 1.29 percent, to Rs 206.30 per mmBtu at 14:32 hours IST with a business turnover of 10,873 lots.
Natural gas delivery for April eased Rs 2.80, or 1.32 percent, to Rs 208.90 per mmBtu with a business volume of 1,909 lots.
The value of March and April’s contracts traded so far is Rs 993.12 crore and Rs 37.75 crore, respectively.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said: “The weather is expected to be warmer than normal throughout most of the US east coast and mid-west for the next 2 weeks but cooler on the west coast. Natural gas has support at Rs 206 levels below which it may come down to Rs 195 levels while resistance for the energy is at Rs 215. Above this, it can go towards Rs 221 levels .”
Natural gas has fallen more than 13 percent from recent highs as weather outlook improved and also amid position squaring ahead of the expiration of the March contract. However, we may see some stability today as market players position for weekly inventory report, said Kotak Securities,
At 09:09 (GMT), the natural gas price was down 0.60 percent quoting at $2.84 per mmBtu in New York.
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