Natural gas futures continued to slide for the fourth day on September 21, with participants increasing their short position, as seen by the open interest. The price was down 2.4 percent on the NYMEX the previous day.
The energy commodity was trading in the negative after a gap-down start, despite positive global cues. It has shed 11.28 percent since hitting the high of Rs 414.80/mmBtu on September 16.
On the MCX, natural gas delivery for September fell Rs 4.30, or 1.16 percent, to Rs 367.90 per mmBtu at 1453 hours with a business turnover of 4,092 lots.
Gas delivery for October edged Rs 3.80, or 1.01 percent, lower to Rs 371.30 per mmBtu with a business volume of 5,079 lots.
The value of September and October's contracts traded so far is Rs 796.43 crore and Rs 425.54 crore, respectively.
MCX iCOMDEX Natural Gas Index lowered 42.17 points or 0.93 percent to 4,477.49.
Natural gas rallied sharply in the last few weeks but the momentum had waned and there were signs of correction, which may extend unless there was a fresh positive trigger, Kotak Securities said. Focus may continue to be on the US weather, the trend in energy price and the storm activity in the Atlantic, it added.
Demand outlook weakened as cooling demand was expected to subside with the end of the summer season. However, US LNG export and higher global prices supported the commodity. Rising energy cost in Asia and Europe has caused made the market nervous.
About 26.83 percent of the Gulf of Mexico gas production remained shut as of September 20, according to the US Bureau of Safety and Environmental Enforcement.
Technicals
The commodity has been trading higher than 20, 50, 100, and 200 day-simple moving averages and exponential moving averages but lower than the 5-day simple and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 61.16, which suggests upbeat movement in the price.
Geojit Financial Services said, “Corrective selloffs are likely as long as the Rs 378 remain caps the upside.”
At 0931 GMT, the natural gas price was up 0.44 percent to $5 per mmBtu in New York.
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