Cedigaz News Reports


Natural gas futures up 1% to Rs 220/mmBtu; expert suggests buy-on-dip strategy.

The momentum indicator Relative Strength Index is at 65.90, which indicates upbeat movement in the prices.

Natural gas futures rose to Rs 220.40 per mmBtu on May 3 as participants increased their long positions as seen by the open interest. Natural gas had gained 0.83 percent last week on the MCX. The energy commodity extended gains after a gap-up start in the afternoon session to trade at day’s high on positive global cues.

The commodity has been trading higher than 5, 20, 50, 100 and 200 days' moving averages on a daily chart. The momentum indicator Relative Strength Index is at 65.90, which indicates upbeat movement in the prices.

The number of rigs drilling natural gas in the US jumped by 2 to 96 rigs for the week to April 30, said energy services firm Baker Hughes in a weekly report. According to the National Oceanic Atmospheric Administration, warmer than normal weather is expected to cover most of the United States for the next 8-14 days. Expectations of a decline in US production due to regularly scheduled pipeline maintenance work also lent support.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have started marginally higher this Monday morning and the early afternoon in Asian trade. Technically, NYMEX Natural Gas could trade in a range of $2.8-$3.1 levels.”

“Technically, MCX Natural Gas May could see sideways momentum in coming session where Rs 221 - Rs 223 will hold as resistances and supports are at Rs 216-Rs 214 levels”, Iyer added.

MCX iCOMDEX Natural Gas Index was up 28.79 points or 1.06 percent to 2,757.97.

In the futures market, natural gas for May delivery touched an intraday high of Rs 221.10 and an intraday low of Rs 218.50 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 184.10 and a high of Rs 222.90.

Natural gas delivery for May gained Rs 2.40, or 1.10 percent, to Rs 220.40 per mmBtu at 14:49 hours IST with a business turnover of 22,382 lots. Natural gas delivery for June soared Rs 2.30, or 1.04 percent, to Rs 224.20 per mmBtu with a business volume of 2,857 lots. The value of May and June’s contracts traded so far is Rs 715.95 crore and Rs 30.63 crore, respectively.

“MCX Natural Gas is trading above the support of short moving average line placed near Rs 218. The price is likely to remain sideways to moderately bullish in today's session”, said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited.

Purohit added buying the dip will be the tactic going forward, as the main trend is up and it’s a little early in the season to chase higher rates.

At 09:23 (GMT), the natural gas price climbed 1.16 percent and was quoting at $2.96 per mmBtu in New York. (May 4, 2021)

INDIA - Natural Gas - PRICE