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Natural gas futures trade flat on higher inventory buildup; bias remains on downside

Technically, NYMEX Natural gas could trade in a range of $2.85-3.10 levels in the coming session.

Mumbai / May 28, 2021 / 03:48 PM IST

Natural gas futures were steady on Friday after declining 2.3 percent yesterday on a disappointing inventory report. The gas price has been trading in a downtrend below the resistance line of 15-SMA of the intraday chart placed at Rs 217.30.

On the Multi-Commodity Exchange (MCX), natural gas delivery for June modestly gained by Rs 0.20, or 0.09 percent, to Rs 215 per mmBtu at 14:26 hours IST with a business turnover of 14,884 lots.

Natural gas delivery for July fell Rs 0.10, or 0.05 percent, to Rs 217.30 per mmBtu with a business volume of 1,282 lots.

The value of June and July’s contracts traded so far is Rs 444.99 crore and Rs 22.13 crore, respectively.

MCX iCOMDEX Natural Gas Index was slightly higher 2.45 points or 0.09 percent to 2,637.34.

Close

Sriram Iyer, Senior Research Analyst at Reliance Securities said, International natural gas futures have started flat this Friday morning and early afternoon in Asian trade. Technically, NYMEX Natural gas could trade in a range of $2.85-3.10 levels in the coming session.”

Technically, MCX Natural gas could see a sideways to marginal downside momentum in coming session where Rs 218-220 levels will hold resistance and support is at Rs 213-211 levels”, Iyer noted.

The US Energy Information Administration (EIA) reported that the country's natural gas inventories increased by 115 billion cubic feet (Bcf) for the week ended May 21 as against market expectations for a build of 90 Bcf. Natural gas in storage was 2,215 Bcf as of May 21, 2021.

The weather is expected to be warmer than normal throughout the United States for the next 6-8 days.

Natural gas witnessed mixed trade in the last few days as market players countered current milder weather over the possibility of higher demand in the coming days. We may see rangebound trade amid no major cues however general bias may be on the downside owing to bigger than average buildup in gas stocks, said Kotak Securities.

Technicals

The commodity has been trading higher than 5, 50, 100 and 200 days' moving averages but lower than the 20-day moving average on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 51.67, which suggests neutral movement in the price.

At 0913 (GMT), the natural gas price was modestly up 0.17 percent quoting at $2.96 per mmBtu in New York.

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