Natural gas futures trade lower at Rs 215.70 per mmBtu

Natural gas futures traded weak at Rs 215.70 per mmBtu on October 23 as participants increased their short positions. The commodity had declined 0.5 percent on the NYMEX on October 22.

The US Energy Information Administration (EIA) reported that US natural gas inventories rose by 49 billion cubic feet (bcf) for the week-ended October 16.

Natural gas prices have been supported by cold weather forecast and increasing LNG exports from the US.

In the futures market, natural gas for October delivery touched an intraday high of Rs 219.80 and a low of Rs 215.40 per mmBtu on the Multi-Commodity Exchange (MCX). So far in the current series, natural gas has touched a low of Rs 179.10 and a high of Rs 225.70.

Natural gas futures for October delivery slipped Rs 6.60, or 2.96 percent, to Rs 216 per mmBtu at 14:25 hours IST on a business turnover of 7,969 lots. The same for November delivery dropped Rs 7.1, or 2.93 percent, to Rs 234.90 per mmBtu on a business volume of 4,177 lots.

The value of October and November’s contracts traded so far is Rs 1,023.95 crore and Rs 128.11 crore, respectively.

"Natural gas has rallied sharply in the last few days but is struggling to maintain its momentum above $3/mmBtu, which could make it susceptible to profit-taking. Hence, fresh long positions should only be considered on corrective dips," said Kotak Securities.

However, Sunand Subramaniam, Senior Research Associate at Choice Broking, expects the bullishness in MCX natural gas futures to continue next week on expectancy of steady supplies, higher demand/usage and rise in inventories.

At 9:00 (GMT), natural gas was down 2.73 percent at $2.93 per mmBtu in New York.