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Natural gas futures surge nearly 2.5% on tight supply, low production; expert recommend a buy

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.

Mumbai / August 02, 2021 / 03:09 PM IST
Natural Gas

Natural Gas

Natural gas futures price climbed on August 2 on tight supply, low production and solid LNG demand. The gas prices had tumbled 3.97 percent last week on the NYMEX.

The energy commodity extended gains after a gap-up start, tracking the bullish global cues.

On the MCX, natural gas delivery for August rose Rs 7, or 2.41 percent, to Rs 297 per mmBtu at 14:25 hours with a business turnover of 12,701 lots.

Gas delivery for September gained Rs 6.60, or 2.26 percent, to Rs 298.10 per mmBtu with a business volume of 2,016 lots.

The value of August and September's contracts traded so far is Rs 970.76 crore and Rs 66.82 crore, respectively.

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MCX iCOMDEX Natural Gas Index advanced 84.33 points or 2.38 percent to 3,628.50.

NS Ramaswamy, Head of Commodities, Ventura Securities said, “As per our last week’s view, MCX NATURAL GAS prices traded positive for the entire week. We expect the uptrend to continue further. Prices may head towards Rs 350 level in coming sessions. Any dip in the prices can be used as an opportunity to create a long position in the counter.”

Ventura Securities Ventura Securities

He advised his clients to buy MCX NATURAL GAS AUG in the range of Rs 290-295 for the target of Rs 330-350 with a stop loss below Rs 270.

Sriram Iyer, Senior Research Analyst at Reliance Securities said,” MCX natural gas started higher this Monday morning and early afternoon Asian trade. Technically, NYMEX natural gas could trade in a range of $3.90-4.10 levels in the coming session.”

“On the domestic front, MCX natural gas August hold strong support near Rs 287-284. Resistance is at Rs 292-2955”, he said.

As per US CFTC data, natural gas speculators raised their net long US futures and options positions by 13,508 contracts to 75,724 for the week ended July 27.

In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US fell by 1 to 103 rigs for the week to July 30.

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 Relative Strength Index (RSI) is at 63.24, which suggests upbeat movement in the price.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited, “Natural gas has been trading with bullish momentum. The key support would be at 15-SMA of hourly chart placed at Rs 291.50 and the immediate resistance would be at Rs 298.50.

At 0909 GMT, the natural gas price was up 2.45 percent at $3.99 per mmBtu in New York.

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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sandeep Sinha

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