Natural gas futures edged higher for the sixth day on September 29 as participants increased their long position as seen by the open interest. The gas prices had risen 2.6 percent yesterday on the NYMEX.
The energy commodity traded in the positive territory after a gap-up start, despite a weak global trend. It touched the high of $6.28/mmBtu in New York yesterday, the highest since 2014.
On the MCX, natural gas delivery for October soared Rs 3.20, or 0.74 percent to Rs 433.70 per mmBtu at 14:30 hours with a business turnover of 6,602 lots.
Gas delivery for November rose Rs 4.60, or 1.05 percent, to Rs 443.30 per mmBtu with a business volume of 2,400 lots.
The value of October and November's contracts traded so far is Rs 1,639.84 crore and Rs 139.41 crore, respectively.
MCX iCOMDEX Natural Gas Index jumped 38.56 points or 0.74 percent to 5,225.75.
Natural gas may remain volatile unless we see some stability in global markets, hence, we recommend some caution and fresh long positions should be built only at corrective dips, said Kotak Securities.
Motilal Oswal said that the gas prices are rallying as a storm-related supply disruption in the US have compounded concerns about slow output growth as drillers heed investors’ call for financial restraint, making it unlikely that shale producers will be able to bail out the rest of the world this winter.
The prices also benefitted from short-covering near contract expiration as speculators are holding huge short positions.
Also supporting prices is the slightly warm weather for the next two weeks which could boost cooling demand.
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 Relative Strength Index (RSI) is at 75.05, which suggests upbeat movement in the price.
Geojit Financial Services said, “Choppy with positive sentiment is likely as long as prices stay above Rs 380. A close below Rs 342 is a sign of weakness.”
At 09:17 GMT, the natural gas price slipped 1.17 percent to $5.81 per mmBtu in New York.
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