Natural gas futures traded lower on August 6 as participants increased their short position as seen by the open interest. The gas price had fallen 0.43 percent yesterday on the NYMEX.
The energy commodity traded in the red after a flat-to gap-down start in the afternoon session, tracking the muted overseas trend.
On the MCX, natural gas delivery for August declined Rs 1, or 0.32 percent, to Rs 307.50 per mmBtu at 14:35 hours with a business turnover of 16,678 lots.
Gas delivery for September slipped Rs 0.90, or 0.29 percent, to Rs 308.80 per mmBtu with a business volume of 3,424 lots.
The value of August and September's contracts traded so far is Rs 900.69 crore and Rs 79.13 crore, respectively.
MCX iCOMDEX Natural Gas Index decreased 13.45 points or 1 percent to 3,756.82.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have turned flat this Friday afternoon in Asian trade. Technically, NYMEX Natural Gas could trade in a range of $4.000-$4.300 levels.”
On the domestic front, MCX Natural Gas August holds strong support near Rs 307-Rs 304 levels. Resistance is at Rs 310-Rs 312 levels”, Iyer noted.
The US Energy Information Administration (EIA) reported that the country's natural gas inventories rose by 13 billion cubic feet (Bcf) for the week ended July 30 against market expectations of a 21 Bcf rise. Natural gas in storage was at 2,714 Bcf as of Friday, July 23, 2021 said EIA.
Natural gas in storage was 2,727 Bcf as of Friday, according to the Department of Energy.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Natural gas has been trading sideways to marginal bearish momentum sustaining below the resistance of 15-SMA of hourly chart placed at Rs 310. The key support is at a Fibonacci retracement of 38% placed near Rs 303.”
“The price moved sideways range in the previous session despite a more petite than expected build in natural gas inventories. It appears for the moment that all the good news is already priced in. The weather is expected to be much warmer than normal”, Purohit added.
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 67.11, which suggests strength in the price.
At 09:20 GMT, the natural gas price was marginally down 0.05 percent at $4.13 per mmBtu in New York.
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