Natural gas futures down 2.31% to Rs 169.30 per mmBtu on higher inventory buildup

Natural gas futures declined to Rs 169.30 per mmBtu on September 11 as participants increased their short position as seen by the open interest.

Natural gas price traded lower on decreased power demand amid mixed weather forecast and recovery in post-storm gas production.

The US Energy Information Administration (EIA) reported that US natural gas inventories jumped by 70 billion cubic feet (BCF) for the week ended September 4.

Sachin Gupta, senior research associate, Choice Broking, said, “Fundamentally for the week ahead, we are estimating MCX Natural Gas futures to trade range-bound in expectancy of lower supplies, higher demand/usage and rise in inventories observed on a weekly basis. Natural Gas inventories have showcased a seasonal rise to 3,680 billion cubic feet, higher by 1.93 percent compared to previously reported inventories of 3,610 BCF.”

The US CPC further expects warmer weather conditions for the next 6-10 days which is expected to support prices from lower levels. Overall, we expect sideways trend in MCX Natural Gas futures in the coming week, he said.

In the futures market, natural gas for September delivery touched an intraday high of Rs 171.10 and an intraday low of Rs 168.20 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 131.30 and a high of Rs 203.

Natural gas delivery for September slipped Rs 4, or 2.31 percent, to Rs 169.30 per mmBtu at 18:31 hours IST with a business turnover of 21,676 lots.

Natural gas delivery for October fell Rs 3.50, or 1.68 percent, at Rs 204.50 per mmBtu with a business volume of 2,736 lots.

The value of September and October’s contracts traded so far is Rs 2,136.46 crore and Rs 53.21 crore, respectively.

MCX Natural Gas price is expected to trade in a range-bound market having support at Rs 168 level and resistance at Rs 173 level, said Motilal Oswal.

At 1304 (GMT), the natural gas price was down 0.52 percent quoting at $2.31 per mmBtu in New York.