Natural gas prices climbed 6.13 percent this week to settle at Rs 341.20 per mmBtu on the MCX after scaling a new 52 week high and the highest level since October 2008, during the week. The energy price rose in three out of five trading sessions on the domestic bourse.
The gas price has been trading higher than the 5, 20, 50, 100 and 200 days' simple moving averages and exponential moving averages on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 73.42, which indicates a bullish momentum in the prices.
NS Ramaswamy, Head of Commodities, Ventura Securities said, “MCX Natural Gas SEPTEMBER prices are holding above the key averages on weekly and daily charts. The RSI indicator on a weekly chart is showing further strength in the momentum on the upside. Prices need to cross the immediate resistance of Rs 350 to continue the ongoing trend on the upside.”
He advised his clients to buy MCX NATURAL GAS SEP above Rs 350 for the target of Rs 380-390 with a stop loss below Rs 325.
The EIA reported that the US natural gas inventories rose by 20 billion cubic feet (Bcf) for the week ended August 27 as against market expectations of a 25 Bcf rise.
The weather is likely to remain warmer than usual for the next two weeks.
According to Bureau of Safety and Environmental Enforcement data, approximately 91.29 percent of Gulf of Mexico gas production remained shut, while electricity outages in parts of the United States impacted demand from the power sector.
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US climbed by 5 to 102 rigs for the week to August 27.
MCX iCOMDEX Natural Gas Index was up 12.16 points or 0.29 percent to end at 4,154.76.
In the futures market, natural gas for September delivery touched an intraday high of Rs 344.50 and an intraday low of Rs 337.40 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 263.20 and a high of Rs 345.50.
Natural gas delivery for September gained Rs 0.50, or 0.15 percent to settle at Rs 341.20 per mmBtu with a business turnover of 15,456 lots.
Natural gas delivery for October soared by Re 1, or 0.29 percent, to close at Rs 345.90 per mmBtu with a business volume of 4,530 lots.
The September and October contracts traded on Friday were at Rs 3,656.28 crore and Rs 284.34 crore, respectively.
Natural gas price settled with a gain of 1.21 percent at $4.69 per mmBtu in New York.
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