Natural gas futures traded slightly higher at Rs 209.50 per mmBtu on Wednesday 3rd March because participants expanded their long positions as seen by the open interest. Natural gas price had risen by 2.2% on 2nd March on the NYMEX.
The commodity has been trading more 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 marks positive momentum in prices.
Natural gas prices saw a sell-off of 15% from their highs regardless of a polar freeze in the US and now all the indicators seem to be on an unusual early warm spell for March. Weather models are moving warmer than normal, likely leading to below-average heating demand. This has been one of the largest contributors to why natural gas prices have tugged 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.”
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 opposition near Rs 211-214 levels and supports near Rs 206-204 levels, he said.
MCX iCOMDEX Natural Gas Index was marginally up 6.59 points, or 0.24% , 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%, 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%, to Rs 212.10 per mmBtu with a business volume of 2,923 lots.
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.”