Natural gas futures scaled a new high of Rs 483.20 per mmBtu during intraday trade on MCX on October 16, the highest since August 2008 as participants increased their long positions as seen by the open interest. gas climbed 9.47 percent on NYMEX the previous day amid worries over a global energy crisis.
The energy commodity traded in the positive after a gap-down start, tracking the firm global trend.
On the MCX, natural gas delivery for October jumped Rs 4.90, or 1.04 percent to Rs 477.80 per mmBtu at 1427 hours with a business turnover of 6,951 lots.
Gas delivery for November soared by Rs 4.90, or 1.01 percent, to Rs 488.20 with a business volume of 2,781 lots.
The value of October and November contracts traded, so far, is Rs 3,193.05 crore and Rs 221.66 crore, respectively.
MCX iCOMDEX Natural Gas Index advanced 97.59 points or 1.71 percent to 5,795.67.
On October 5, natural gas closed above $6 on heavy volume after making several attempts in the last few days amid tighter supply and concerns about the upcoming high-demand winter season.
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Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited, said, “Strong demand from Europe keeps the arbitrage open, allowing LNG producers to ship the product and profit. Shipping costs are gradually closing the gap, as are higher natural gas prices in the United States. The momentum is still strong.”
“The continuation contract set a new seven-year high and is set to target resistance near $6.5. A monthly close above that level would result in a test of the 2008 highs."
US natural gas jumped to a 12-year high as global shortages of the fuel fanned fears in the country ahead of the winter. With rising energy feedstock costs, major consumers have expressed fear that inflation could eat away gradually returning growth, said Motilal Oswal.
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The commodity has been trading higher than 5, 20, 50, 100, and 200-day simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 74.78, which suggests a buy in the price.
Anand Rathi Investment Services said MCX October natural gas has support at Rs 445.84 and resistance at Rs 486.74.
At 0917 GMT, the natural gas price gained 1.19 percent to $6.38 per mmBtu in New York.
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