Natural gas futures price snapped a seven-day winning streak and turned lower on July 28 as participants increased their short position as seen by the open interest. The gas price had fallen 3.19 percent yesterday on the NYMEX.
The energy commodity extended decline to trade at day’s low after a gap-down start, tracking the weak global trend.
On the MCX, natural gas delivery for August fell Rs 7.10, or 2.41 percent, to Rs 287.60 per mmBtu at 14:33 hours with a business turnover of 12,087 lots.
Gas delivery for September tanked Rs 6.80, or 2.30 percent, to Rs 288.40 per mmBtu with a business volume of 1,662 lots.
The value of August and September's contracts traded so far is Rs 1,334.69 crore and Rs 79.29 crore, respectively.
MCX iCOMDEX Natural Gas Index decreased 86.77 points or 2.41 percent to 3,513.62.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have started weaker this morning and early afternoon in Asian trade. Technically, NYMEX Natural Gas could trade in the range of $3.800-4.100 levels.”
“On the domestic front, MCX Natural Gas supports are Rs 293.45-287.85 levels. Resistance is at Rs 300-311.45 levels,” he said.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Natural gas is trading with a marginally bearish trend towards the psychological support of Rs 290, sustaining below the trailing resistance of 15-SMA of hourly chart placed at Rs 295.90. The weather is expected to be warmer than average throughout most of the United States for the next two weeks.”
The gas prices fell on profit-booking by investors after last week’s US natural gas inventories are estimated to have climbed by approximately 20 billion cubic feet more than the five-year average for the same week.
According to EIA, US exports of liquified natural gas continued to grow in the first six months of 2021, averaging 9.6 billion cubic feet per day. This average marks an increase of 42 percent, or 2.8 Bcf, compared with the same period in 2020.
Technicals
The commodity has been trading higher than 20, 50, 100 and 200 days' moving averages but lower than the five-day moving averages on the daily chart. The momentum indicator RSI is at 60.56, which suggests a bullish movement in the price.
At 09:21 GMT, the natural gas price dropped 1.83 percent at $3.87 per mmBtu in New York.
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