Natural gas futures climbed on May 17 as the forecast suggested warmer weather and a decline in rig count. The gas price fell 0.41 percent last week on the domestic bourse.
On the Multi-Commodity Exchange (MCX), natural gas delivery for May rose Rs 5.60, or 2.59 percent, to Rs 222 per mmBtu at 14:44 hours IST with a business turnover of 21,990 lots.
Natural gas delivery for June gained Rs 5.30, or 2.39 percent, to Rs 226.80 per mmBtu with a business volume of 6,608 lots.
The value of May and June’s contracts traded so far is Rs 759.50 crore and Rs 123.79 crore, respectively.
MCX iCOMDEX Natural Gas Index jumped 66.24 points or 2.44 percent to 2,783.32.
Sriram Iyer, Senior Research Analyst at Reliance Securities, said, “International natural gas futures have started gap-up trade this morning and in the early afternoon in Asian trade. Technically, NYMEX Natural Gas could face an immediate hurdle at $3.060 and a break above will push the price to $3.105. Supports are at $3.015 and $2.990.”
On the MCX Natural Gas May, resistances are at Rs 222.85 and trade above will push the price to Rs 230 while supports are at Rs 216 and 212 levels,” Iyer added.
Natural gas speculators raised their net long positions by 11,460 contracts to 237,423 in the week to May 11, the US CFTC data showed.
Also read: Natural gas price drops to Rs 216.40 per mmBtu; experts suggest buy-on-dips strategy
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US fell by 3 to 100 rigs for the week to May 14.
The weather is expected to remain warmer than normal for most of the next two weeks, which could put some upward pressure on cooling demand and capped further downside.
The commodity has been trading higher than 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 63.34 which indicates a bullish sentiment.
At 0930 (GMT), the natural gas price gained 2.47 percent quoting at $3.03 per mmBtu in New York.
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