Natural gas futures slump 3.36% to Rs 184.10 per mmBtu on muted global cues

Natural Gas

Natural gas futures tumbled to Rs 184.10 per mmBtu on March 15 as participants increased their short positions as seen by the open interest. Natural gas price had fallen 3.39 percent last week on the MCX.

The energy extended decline in the afternoon after a gap-down start tracking weak global trends.

The commodity has been trading lower than 5, 20, 50 and 100 days' moving averages but higher than the 200-day moving average on a daily chart. The Relative Strength Index (RSI) is at 34.56 which indicates bearish momentum in prices.

The number of rigs drilling natural gas in the US remained unchanged at 92 rigs for the week to March 12, said energy services firm Baker Hughes in a weekly report.

Speculators cut their net long natural gas futures and options positions by 45,659 contracts to 284,213 in the week to March 9, according to US CFTC data.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have started gap down this Monday morning and early afternoon in Asian trade. Technically, NYMEX Natural Gas could trade in a range of $2.44-2.70 levels.”

MCX March Natural Gas holds resistance near Rs 193-197 levels and support near Rs 187-184 levels, he said.

MCX iCOMDEX Natural Gas Index fell 83 points or 3.31 percent to 2,426.77.

In the futures market, natural gas for March delivery touched an intraday high of Rs 188.80 and an intraday low of Rs 183.90 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 by Rs 6.40, or 3.36 percent, to Rs 184.10 per mmBtu at 14:28 hours IST with a business turnover of 14,153 lots.

Natural gas delivery for April decreased by Rs 5.70, or 2.94 percent, to Rs 188.20 per mmBtu with a business volume of 2,273 lots.

The value of March and April’s contracts traded so far is Rs 591.16 crore and Rs 57.58 crore, respectively.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “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. The support for the natural gas is at Rs 184 levels, and below it may come down to Rs 180 levels while the resistance for the energy is at Rs 192.”

At 09:00 (GMT), the natural gas price was down 2.54 percent quoting at $2.53 per mmBtu in New York.

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