Natural gas futures slump 2.65% to Rs 146.70 per mmBtu on buildup in US inventory

Natural gas futures slumped to Rs 146.70 per mmBtu on September 18 as participants increased their short positions. The commodity had declined 9.9 percent on the NYMEX on September 17.

The US Energy Information Administration (EIA) reported that US natural gas weekly inventories jumped by 89 billion cubic feet (BCF) versus forecast of 77 BCF, along with lower demand forecast for the week-ended September 11 on account of Hurricane Sally.

Prices have been supported by supply disruption caused by increased storm activity in the Atlantic. According to US Bureau of Safety and Environmental Enforcement update, approximately 28.03 percent of Gulf of Mexico gas production has been shut due to Hurricane Sally.

In the futures market, natural gas for September delivery touched an intraday high of Rs 176 and a low of Rs 174.20 per mmBtu on the Multi-Commodity Exchange (MCX). So far in the current series, the commodity has touched a low of Rs 131.30 and a high of Rs 203.

Sunand Subramaniam, Senior Research Associate, Choice Broking said, “For the week ahead, we are estimating natural gas to trade moderate bearish in expectancy of steady supplies, higher demand/usage and rise in inventories observed on a weekly basis.”

In the futures market, natural gas for September delivery touched an intraday high of Rs 148.20 and a low of Rs 143.50 per mmBtu on the Multi-Commodity Exchange (MCX). So far in the current series, the commodity has touched a low of Rs 131.30 and a high of Rs 203.

Natural gas futures for September delivery slipped Rs 4, or 2.65 percent, to Rs 146.70 per mmBtu at 14:46 hours IST on a business turnover of 17,964 lots.

The same for October eased Rs 1.5, or 0.79 percent, at Rs 188.30 per mmBtu on a business volume of 1,871 lots.

The value of September and October’s contracts traded so far is Rs 1,129.22 crore and Rs 45.66 crore, respectively.

At 09:17 (GMT), the natural gas was up 2.45 percent at $1.99 per mmBtu in New York.

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