Natural gas futures traded marginally higher at Rs 209.50 per mmBtu on March 3 as participants increased their long positions as seen by the open interest. Natural gas price had surged 2.2 percent on March 2 on the NYMEX.
The energy traded in the green after a gap-down start in the afternoon session tracking positive global cues.
The commodity has been trading higher than 5,50,100 and 200 days' moving averages, but lower than the 20-day moving average on a daily chart. The Relative Strength Index (RSI) is at 51.34 which indicates positive momentum in prices.
Natural gas prices saw a sell-off of 15 percent from their highs despite a bone-chilling freeze in the US and suddenly all bets seem to be on an unusual early warm spell for March. Weather models are trending warmer than normal, likely leading to below-average heating demand. This has been one of the biggest factors for why natural gas prices have pulled back from $3.1 to just $2.9 mmBtu.
Navneet Damani, Vice President, Motilal Oswal, said, “The near-term outlook is leaning more bearish with warmer than normal weather on the horizon. From a fundamental standpoint, we should bear in mind that spring is approaching, with a perfect storm and widespread shortages provided the catalyst for the market to move higher, and the lack of upside price action suggests a likely period of consolidation before a sustained move higher later in late April or May, which means that the lower demand for heating. Hence, natural gas should decline and touch levels of $2/mmBtu in the coming months."
LNG pioneer Cheniere Energy Inc reported this week that it exported 130 cargoes during 4Q2020, flat from the year-ago period. Over the full year, it exported 391 LNG cargoes down 9 percent from 2019.
Sriram Iyer, Senior Research Analyst at Reliance Securities, said, “International natural gas futures have started flat this Wednesday morning and traded higher in the early afternoon in Asian trade. Technically, NYMEX Natural Gas could trade in a range of $2.60-2.98 levels.”
MCX March Natural Gas holds resistance near Rs 211-214 levels and supports near Rs 206-204 levels, he said.
MCX iCOMDEX Natural Gas Index was slightly up 6.59 points, or 0.24 percent, to 2,758.77.
In the futures market, natural gas for March delivery touched an intraday high of Rs 210.60 and an intraday low of Rs 207.50 per mmBtu on the MCX. So far in the current series, natural gas has touched a low of Rs 175 and a high of Rs 222.20.
Natural gas delivery for February gained Rs 0.60, or 0.29 percent, to Rs 209.50 per mmBtu at 14:41 hours IST with a business turnover of 12,812 lots.
Natural gas delivery for April jumped Rs 0.40, or 0.19 percent, to Rs 212.10 per mmBtu with a business volume of 2,923 lots.
The value of March and April’s contracts traded so far is Rs 1,023.90 crore and Rs 40.45 crore, respectively.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “Natural gas has support at Rs 203 below it may come down to 197 levels. The resistance for the energy is Rs 211 above this natural gas go towards Rs 224 levels.”
At 09:14 (GMT), the natural gas price soared 0.88 percent quoting at $2.86 per mmBtu in New York.
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