Natural gas futures slip ahead of EIA inventory report

Natural gas futures traded weak on October 21 as the market awaited Energy Information Administration (EIA) weekly inventory report scheduled for release later in the day. Gas prices had jumped 1.61 percent yesterday on the NYMEX.

The energy commodity traded in the red since morning, tracking the muted overseas cues.

On the MCX, natural gas delivery for October slides Rs 4.40, or 1.13 percent to Rs 383 per mmBtu at 14:30 hours with a business turnover of 3,442 lots.

Gas delivery for November slumped Rs 3.70, or 0.90 percent, to Rs 405.90 per mmBtu with a business volume of 3,657 lots.

The value of October and November's contracts traded so far is Rs 612.11 crore and Rs 198.40 crore, respectively.

MCX Enrgdex declined by 2 points or 0.03 percent at 6,444 at 2.32pm. The index tracks the real-time performance of MCX Crude Oil and MCX Natural Gas futures.

“Natural gas prices rose on Wednesday after bouncing off support and resuming their upward trend. Support can be found near the 50-day moving average which is located near $4.90. MCX Natural gas is trading near Rs 385, support sen at Rs 387-393 while resistance is at Rs 397-410,” said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited. 

Market participants now look forward to EIA weekly inventory report scheduled for release later today. Expectations are for a 91 billion cubic feet (Bcf) build in stockpiles, according to survey provider Estimize.

As per National Oceanic and Atmospheric Administration, the weather will remain warmer than normal for the next two weeks across most of the mid-West and East Coast. forecast a mild winter in its three-month temperature outlook also weighed on the price.

Technicals

The commodity has been trading higher than 50, 100, and 200-day simple and exponential moving averages but lower than the 5 and 20 days SMA and EMA on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 46.78, which indicates a subdued trend in price.

At 0915 GMT, the natural gas price was down 0.95 percent at $5.12 per mmBtu in New York.

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