Natural gas futures firm at Rs 138.40 per mmBtu in afternoon trade

Natural gas futures rose to Rs 138.40 per mmBtu on September 22 as participants increased their long positions as seen by the open interest. Natural gas had declined 10. 4 percent yesterday on NYMEX.

Natural gas prices slumped yesterday as part of sell-off across commodities on worries about rising coronavirus cases and a report of suspicious worldwide banking transactions.

According to the US Bureau of Safety and Environmental Enforcement, about 5.98 percent of natural gas production in the Gulf of Mexico was as of September 21 as against 7.72 percent a day earlier.

The spread between NYMEX October and November contracts stood at a record level of $0.875/mmBtu at yesterday’s close. The widening of the spread shows selling pressure on near month contracts owing to slack weather-related demand and higher stocks.

In the futures market, natural gas for September delivery touched an intraday high of Rs 138.90 and an intraday low of Rs 135.90 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 gained Rs 3.60, or 2.67 percent, to Rs 138.40 per mmBtu at 15:02 hours IST with a business turnover of 13,360 lots.

Natural gas delivery for October slipped Rs 3.90, or 1.96 percent at Rs 195 per mmBtu with a business volume of 3,051 lots.

The value of September and October contracts traded so far is Rs 780.65 crore and Rs 93.94 crore, respectively.

Natural gas plunged sharply in the last few days and while overall sentiment is negative we recommend waiting for higher levels to create fresh short as price trades near the key level of $1.8/mmBtu, said Kotak Securities.

At 09:34 (GMT), the natural gas price was up 2.62 percent quoting at $1.88 per mmBtu in New York.