Natural gas futures fall on weak global trend, rising rig count; support seen at Rs 267 on MCX

Natural gas futures price fell on July 12 as participants raised their bearish bet as seen from the open interest. The gas prices had declined Rs 1.2 or 0.43 percent last week on the MCX.

The energy price traded in the red after a gap-down start tracking the weak global trend.

On the MCX, natural gas delivery for July dropped Rs 3.80, or 1.38 percent, to Rs 272 per mmBtu at 14.39 hours with a business turnover of 15,812 lots.

Gas delivery for August slipped Rs 3.50 or 1.24 percent to Rs 271.70 per mmBtu with a business volume of 2,192 lots.

The value of July and the August's contracts traded so far is Rs 632.47 crore and Rs 61.49 crore, respectively.

MCX iCOMDEX Natural Gas Index declined 41.56 points or 1.24 percent to 3,320.52.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited, said, "MCX Natural future has opened on a slightly negative note, trading with marginal bearish to sideways momentum, heading towards the support low of Rs 267. The key resistance holds near psychological level of Rs 280.”

The weather is expected to remain warmer than normal for the next two weeks on both east and west coast of the United States, putting upward pressure on cooling demand.

In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US jumped by 2 to 101 rigs for the week to July 9.

Technicals

The commodity has been trading higher than 20, 50, 100 and 200 days' moving averages but lower than the 5-day moving averages on the daily chart. The momentum indicator RSI is at 63.37, which suggests strength in the price.

At 0921 GMT, the natural gas price was down 0.79 percent at $3.64 per mmBtu in New York.

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