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Natural gas futures slumped to Rs 183.80 per mmBtu on December 4 as participants increased their short positions as seen by the open interest. Natural gas price had declined 9.8 percent on December 3 on the NYMEX.
The US Energy Information Administration (EIA) reported that US natural gas inventories decreased by 1 billion cubic feet (bcf) for the week ended November 27.
Natural gas prices were also weighed down by forecast of milder weather in mid-December.
“Natural gas price corrected sharply last night, price is taking cues from US weather which is warm above normal this weekend causing low consumption of the commodity. We are expecting late start in winter may drag the price down,” Kshitij Purohit, Product Manager, Currency and Commodities, CapitalVia Global Research Ltd said.
“Natural gas has downside support at Rs 186 which is also 100 Days SMA and will be the key level for the commodity, whereas Rs 194 act as day resistance. Price is expected to trade between Rs 186-194 levels,” Purohit said.
MCX iCOMDEX Natural Gas Index was down 33.41 points, or 1.45 percent, at 2,275.71 at 14:29.
In the futures market, natural gas for December delivery touched an intraday high of Rs 187 and an intraday low of Rs 182.10 per mmBtu on the MCX. So far in the current series, natural gas has touched a low of Rs 182.10 and a high of Rs 259.80.
Natural gas delivery for December slides Rs 2.80, or 1.50 percent, to Rs 183.80 per mmBtu at 14:25 hours IST with a business turnover of 13,966 lots.
Natural gas delivery for January dropped Rs 2.40, or 1.28 percent, to Rs 185.40 per mmBtu with a business volume of 1,642 lots.
The value of December and January’s contracts traded so far is Rs 1,090.71 crore and Rs 47.35 crore, respectively.
Natural gas plunged sharply on December 3, denting market sentiment, however mixed factors and support near $2.5/mmBtu level may result in some recovery, said Kotak Securities.
At 08:57 (GMT), the natural gas price was down 0.84 percent quoting at $2.48 per mmBtu in New York.
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