Natural gas futures declined on July 16 as US inventory buildup was higher than expected as reported by EIA. The gas prices had fallen 0.6 percent yesterday on the NYMEX.
The energy commodity traded in the red after a gap-down start, tracking the muted global cues.
On the MCX, natural gas delivery for July slipped Rs 2.10, or 0.77 percent, to Rs 269 per mmBtu at 14:26 hours with a business turnover of 15,363 lots.
Gas delivery for August dropped Rs 2.10, or 0.78 percent, to Rs 268.80 per mmBtu with a business volume of 3,797 lots.
The value of July and August's contracts traded so far is Rs 596.20 crore and Rs 88.13 crore, respectively.
MCX iCOMDEX Natural Gas Index decreased 25.67 points or 0.78 percent to 3,285.08.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Natural gas is trading with moderately bearish trend along with the resistance of moving average resistance line near Rs 272. The prices moved lower in the wake of Thursday’s inventory report from the Department of Energy. According to NOAA report, the weather is expected to remain warmer than normal for the next 2 weeks.”
The US Energy Information Administration (EIA) reported that the country's natural gas inventories rose by 55 billion cubic feet (Bcf) for the week ended July 9 against market expectations of a 48 Bcf rise. Natural gas in storage was at 2,629 Bcf as of Friday, July 9, 2021, said EIA.
Natural gas has been range-bound amid mixed factors. Focus may continue to be on the US weather and trend in energy prices, storm activity in the Atlantic and weekly rig activity report, said Kotak Security.
Technicals
The commodity has been trading higher than 20, 50, 100 and 200-day moving averages but lower than the 5-day moving averages on the daily chart. The momentum indicator RSI is at 58.63, which suggests buying.
At 09:04 GMT, the natural gas price was down 0.33 percent at $3.60 per mmBtu in New York.
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