Natural gas futures price traded firm and touched fresh 52 weeks high on the MCX during intraday as participants raised bullish bet as seen from the open interest. The gas prices had risen 1.01 percent yesterday on the MCX.
The energy price traded in the green after a positive start in the afternoon session tracking a strong global trend.
On the MCX, natural gas delivery for July gained Rs 0.80, or 0.28 percent, to Rs 282.00 per mmBtu at 14.31 hours with a business turnover of 20,221 lots.
Gas delivery for August rose 1.10 percent to Rs 280.70 per mmBtu with a business volume of 2,073 lots.
The value of July and August's contracts traded so far is Rs 805.40 crore and Rs 53.38 crore, respectively.
MCX iCOMDEX Natural Gas Index increased 10.96 points or 0.32 percent to 3,436.37.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited, said, “MCX Natural future is trading with bullish momentum towards the resistance of Rs 285.50, formed a rising channel pattern in an intraday chart as a heatwave in Western Canada and the US Pacific Northwest drove spot cash price sharply higher.”
Hot weather also moves into the East Coast, contributing 30.5 cent jump in Natural Gas Intelligence’s weekly spot national average, he said.
The gas prices have come off the December 2018 highs set last week but remains supported by expectations of higher cooling demand as weather forecast points to hot weather in the United States.
However, weighing on the price is bigger than average buildup in US gas stocks and third weekly rise in US natural gas rig count which suggests improving production outlook.
Technicals
The commodity has been trading higher than 5, 20, 50, 100 and 200 days' simple moving averages and exponential moving averages on the daily chart. The momentum indicator RSI is at 81.77, which indicates an overbought level in the price.
Kotak Securities said the momentum for natural gas remains positive however the recent rally has been too sharp and one needs to be cautious on creating fresh long positions.
At 0911 GMT, the natural gas price jumped 2.08 percent at $3.77 per mmBtu in New York.
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