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Natural gas futures fall over 1.5% on profit booking, support seen at Rs 293 level

The momentum indicator Relative Strength Index (RSI) is at 66.19, which suggests upbeat movement in the price.

Mumbai / July 30, 2021 / 03:26 PM IST

Natural gas futures declined on July 30 as participant raised their bearish bets as can be seen from the open interest. The gas prices soared 2.3 percent yesterday on the NYMEX.

The energy commodity traded in the negative after a gap-down start, tracking the bearish global trend.

On the MCX, natural gas delivery for August fell Rs 4.90, or 1.62 percent, to Rs 297 per mmBtu at 14:50 hours with a business turnover of 15,139 lots.

Gas delivery for September eased Rs 4.70, or 1.55 percent, to Rs 297.90 per mmBtu with a business volume of 1,961 lots.

The value of August and September's contracts traded so far is Rs 1,187.34 crore and Rs 92.76 crore, respectively.

Close

MCX iCOMDEX Natural Gas Index dropped 61.11 points or 1.66 percent to 3,632.17.

Sriram Iyer, Senior Research Analyst at Reliance Securities said,” MCX natural gas started weaker this Friday morning and early afternoon Asian trade amid profit booking. Technically, NYMEX natural gas could trade in a range of $3.850-4.150 levels.”

“On the domestic front, MCX natural gas supports are Rs 297-293 while resistances are at Rs 303-305”, he said.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX natural gas is trading with the marginally bearish trend after claiming over the resistance of Rs 300 in the previous session, made a high of Rs 304. The key support level is at Rs 292.50. Overall trend will be marginally bearish for rest of the session.”

The US Energy Information Administration (EIA) reported that the country's natural gas inventories rose by 36 billion cubic feet (Bcf) for the week ended July 23 against market expectations of a 47 Bcf rise. Natural gas in storage was at 2,714 Bcf as of Friday, said EIA.

Also weighing on the price is switching to coal for power generation and concerns about the US economy amid rising coronavirus cases and disappointing economic data.

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 Relative Strength Index (RSI) is at 66.19, which suggests upbeat movement in the price.

Kotak Securities said natural gas may remain choppy amid mixed factors however the general bias may be on the downside unless there is a further rise in demand expectations.

At 09:31 GMT, the natural gas price was down 1.8 percent at $3.98 per mmBtu in New York.

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Sandeep Sinha
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