Natural gas futures traded firm on July 2 as participants raised their bullish bet as seen from the open interest. The gas prices had modestly rose 0.3 percent yesterday on the NYMEX.
The energy price pared morning gains after a gap-up start tracking muted global cues.
On the MCX, natural gas delivery for July gained Rs 0.90, or 0.33 percent, to Rs 273.20 per mmBtu at 14.24 hours with a business turnover of 17,872 lots.
Gas delivery for August jumped 0.37 percent, to Rs 271.60 per mmBtu with a business volume of 1,824 lots.
The value of July and August's contracts traded so far is Rs 927.84 crore and Rs 57.80 crore, respectively.
MCX iCOMDEX Natural Gas Index increased 8.53 points or 0.26 percent to 3,325.52.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited, said, “MCX Natural is trading with bearish momentum since a previous evening after the release of EIA inventory with a surplus at 76 BCF. The key support of July contract holds near Rs 268.80 and if the price break below this mark, we may expect more bearish momentum towards Rs 260 by evening session.”
The US Energy Information Administration (EIA) reported that the country's natural gas inventories rose by 76 billion cubic feet (Bcf) for the week ended June 25 against market expectations of a 68 Bcf rise.
The gas prices were supported by increased cooling demand due to hot weather conditions in the United States and increased export prospects.
Natural gas rallied sharply in the last few days which pushed it into overbought territory as is evident from the Relative Strength Index (RSI) indicator. With bearish inventory report and weekend position, we may see some profit-taking, said Kotak Securities.
Technicals
The commodity has been trading higher than 5, 20, 50, 100 and 200 days' simple moving averages and exponential moving averages on the daily chart. The momentum indicator RSI is at 78.07, which suggests some correction may take place in the price.
At 0907 GMT, the natural gas price was down 0.68 percent at $3.63 per mmBtu in New York.
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