Natural gas prices subdued on muted global cues, focus shift to weekly inventory report

Natural gas futures edged lower on Thursday tracking muted cues in the NYMEX. Natural gas eased as market participants shift focus to the weekly inventory report.

On the Multi-Commodity Exchange (MCX), Natural gas delivery for May slipped Rs 0.60, or 0.27 percent, to Rs 217.60 per mmBtu at 14:24 hours IST with a business turnover of 21,087 lots.

Natural gas delivery for June declined Rs 0.70, or 0.31 percent, to Rs 221.80 per mmBtu with a business volume of 2,845 lots.

The value of May and June’s contracts traded so far is Rs 463.99 crore and Rs 15.56 crore, respectively.

MCX iCOMDEX Natural Gas Index was down 8.76 points or 0.32 percent to 2,721.68.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have started flat this Thursday morning and in the early afternoon in Asian trade and could remain range-bound as traders continue to assess the latest short-term weather patterns and position themselves ahead of EIA storage report.” 

“Technically, NYMEX Natural Gas could trade in a range of $2.8-3.1 levels." On the MCX Natural Gas May resistances remain at Rs 219-221 whereas supports remain at Rs 215-213 levels”, Iyer added.

The weather-related demand is likely to subside amid forecasts of seasonal weather in the coming days. US gas exports are near record high level however a sustained rise is difficult owing to capacity constraints.

Natural gas corrected after testing $3/mmBtu level however we need a fresh trigger for a sharper fall, said Kotak Securities.

Technicals

The commodity has been trading higher than 20, 50, 100 and 200 days' moving averages but lower than the 5-day moving average on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 62.70 which indicates positive movement in the prices.

At 0910 (GMT), the natural gas price was slightly higher 0.24 percent quoting at $2.94 per mmBtu in New York.

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