Natural gas fell as participants raised short positions
Natural gas futures declined to Rs 185.40 per mmBtu on Tuesday as participants raised their short positions. The prices had increased by 1.9% on March 22 on the NYMEX.
The energy commodity traded in red after a gap-down start in the afternoon session, tracking the muted overseas trend.
Oil has been trading higher than 5 and 200 days’ moving averages. However, it smaller than the 20, 50, and 100 days’ moving average on a daily chart for the April contract. The Relative Strength Index (RSI) stands at 42.87, which shows weakness in the prices.
According to Kotak Securities, natural gas is viewing some renewed buying interest. However, a sharp growth is unlikely owing to mixed factors in place.
The gas prices were getting support from the record US LNG exports, and the narrowing gap with coal raises the appeal to use gas for power generation.
The warm weather should weigh on heating demand
The Energy Information Administration announces that the total U.S. consumption of natural gas declined by 3.9% compared with the previous report.
Another essential thing to mention is that Kshitij Purohit from CapitalVia Global Research Limited says the weather is expected to be warmer than normal during most of the east coast and the mid-west for the next 8-14 days. He said it should weigh on heating demand.
MCX iCOMDEX Natural Gas Index declined by 2.59 points, which equals 0.11%, and settled at 2,447.59.
In the futures market, natural gas for March delivery reached an intraday high of Rs 186.10. However, it hit an intraday low of Rs 184.10 per mmBtu on the Multi Commodity Exchange.
Natural gas delivery for March declined by Rs 0.60, which equals 0.32% to Rs 185.40 per mmBtu with a business turnover of 9,326 lots.
Meanwhile, natural gas delivery for April fell Rs 0.20, or 0.11%, and hit Rs 188.90 per mmBtu with a business volume of 7,715 lots.
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