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Natural gas futures steady at Rs 182.90 per mmBtu ahead of inventory report

The commodity has been trading higher than its 5 and 200-day moving averages but lower than the 20, 50 and 100-day moving average on a daily chart for the April contract. The Relative Strength Index is at 42.50, which indicates weak momentum in the prices.

Mumbai / March 25, 2021 / 03:05 PM IST

Natural gas futures were mildly lower at Rs 182.90 per mmBtu on March 25 as participants increased their short positions as seen by the open interest. On NYMEX, the price had declined 0.4 percent the previous day.

The energy commodity recovered losses and traded in the negative territory after a gap-down start in the afternoon session, tracking muted global cues.

The commodity has been trading higher than 5 and 200-day moving averages but lower than the 20, 50 and 100-day moving averages on a daily chart for the April contract. The Relative Strength Index (RSI) is at 42.50, which indicates a weak momentum in prices.

Natural gas was under pressure amid positioning ahead of inventory. Expectations are for a 10 BCF draw, according to survey provider Estimize. Net withdrawal in the prior week was 11 BCF.

The weather is expected to be warmer than normal throughout most of the US for the next eight-14 days and will weigh on prices.

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Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have started weaker this Thursday morning and early afternoon in Asian trade. Technically, NYMEX Natural Gas could trade in a range of $2.40-2.58 levels.”

“Technically, MCX Natural Gas March resistance is at Rs 189.50 and Rs 193 levels and supports are at Rs 184.30 and Rs 181.30," Iyer added.

MCX iCOMDEX Natural Gas Index was down 7.78 points or 0.32 percent to 2,424.26.

In the futures market, natural gas for March delivery touched an intraday high of Rs 183.90 and an intraday low of Rs 181.50 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 Rs 0.20, or 0.11 percent, to Rs 182.90 per mmBtu at 1446 hours, with a business turnover of 7,187 lots.

Natural gas delivery for April eased Rs 0.60, or 0.32 percent, to Rs 187.10 per mmBtu with a business volume of 8,568 lots.

The value of March and April’s contracts traded so far is Rs 506.54 crore and Rs 128.13 crore, respectively.

“Natural gas has support at Rs 176 below it may come down Rs 170 levels, whereas resistance for the energy is at Rs 187," Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said.

Natural gas has come off recent lows, which show that some buying interest is emerging, however, fresh triggers are needed to sustain the gains, Kotak Securities said. A smaller stock withdrawal is negative for the price but already factored in to some extent, so we may not see extended losses unless EIA misses market expectations, it said.

At 0920 GMT, the natural gas price fell slightly 0.08 percent quoting at $2.51 per mmBtu in New York.

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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sandeep Sinha

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