Natural gas futures marginally lower at Rs 181 per mmBtu on weak demand

Natural gas futures edged lower to Rs 181 per mmBtu on March 16 as participants increased their short positions as seen by the open interest. Natural gas price had declined 2.78 percent yesterday on the NYMEX.

The energy commodity trade in the negative territory afternoon after a gap-down start tracking muted global trends.

The commodity has been trading lower than 5, 20, 50 100 and 200 days' moving averages on a daily chart. The Relative Strength Index (RSI) is at 32.67 which indicates bearish momentum in prices.

Natural gas has corrected 23 percent from the highs as weather normalised in the US dampening demand while production resumed.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “Natural gas traded negative during the last trading day. The weather is expected to be much colder than normal in Texas which is somewhat concerning. The EIA forecasts that US production of natural gas declined in February as a result of the freeze-off in the southern US. Support for the Natural Gas is at Rs 179 levels below it may come down Rs 175 levels whereas the resistance for the energy is at Rs 189.

MCX iCOMDEX Natural Gas Index dropped 6.59points or 0.28 percent to 2,384.61.

In the futures market, natural gas for March delivery touched an intraday high of Rs 181.80 and an intraday low of Rs 180.50 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 175 and a high of Rs 222.20.

Natural gas delivery for March slipped Rs 0.50, or 0.28 percent, to Rs 181 per mmBtu at 14:30 hours IST with a business turnover of 15,596 lots.

Natural gas delivery for April fell Rs 0.20, or 0.11 percent, to Rs 184.90 per mmBtu with a business volume of 2,575 lots.

The value of March and April’s contracts traded so far is Rs 502.70 crore and Rs 29.28 crore, respectively.

Natural gas has corrected sharply from recent highs and may see some extended losses with a weakening demand outlook. However, we do not expect a sharp decline. US weather forecasts are pointing to milder weather which may keep a check on demand, said Kotak Securities.

At 09:07 (GMT), the natural gas price was slightly up 0.08 percent quoting at $2.48 per mmBtu in New York.

For all commodities-related news, click here

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.