Natural gas futures fall 1.3% to Rs 200 per mmBtu ahead of inventory report

Natural gas futures traded weaker at Rs 200.20 per mmBtu on April 22 as participants increased their short positions as seen by the open interest. Natural gas had fallen 1.3 percent on April 21 on NYMEX.

The energy commodity extended decline after a gap-up start in the afternoon session, tracking a negative global trend.

The commodity has been trading higher than 20, 50, 100 and 200 days' moving averages but lower than the 5-day moving average on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 55.91, which indicates upbeat movement in the prices.

The gas price has been trading range-bound ahead of EIA weekly inventory report later in the day. Expectations are for a 50 billion cubic feet (Bcf) build in stockpiles, as per survey provider Estimize.

The weather is expected to be warmer than normal, reducing heating demand in the final weeks of potentially cold weather.

Sriram Iyer, Senior Research Analyst at Reliance Securities, said, “International natural gas futures have started flat this Thursday morning and turned weaker in the early afternoon in Asian trade. Technically, NYMEX Natural Gas could trade in a range of $2.55-2.80 levels.”

“Technically, MCX Natural Gas April holds resistance near Rs 205.50 - Rs 207 levels and has support near Rs 201 - Rs 199 levels”, Iyer added.

MCX iCOMDEX Natural Gas Index was down 26.27 points or 1 percent to 2,590.29.

In the futures market, natural gas for April delivery touched an intraday high of Rs 203.50 and an intraday low of Rs 199.70 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 179.80 and a high of Rs 223.

Natural gas delivery for April slipped by Rs 2.70, or 1.33 percent, to Rs 200.20 per mmBtu at 15:15 hours IST with a business turnover of 8,948 lots.

Natural gas delivery for May fell Rs 2.10, or 1 percent, to Rs 207 per mmBtu with a business volume of 12,492 lots.

The value of April and May’s contracts traded so far is Rs 421.48 crore and Rs 303.93 crore, respectively.

Natural gas has rallied sharply in the last few days; however, the rally has petered out near $2.75/mmBtu levels. Natural gas may remain under pressure amid expectations of weaker demand and well supplied US market unless there is a surprise element in the weekly inventory report, said Kotak Securities.

At 09:48 (GMT), the natural gas price declined 0.82 percent to $2.67 per mmBtu in New York.

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