May 15, 2021 07:30 PM
Natural gas prices weakened 0.41 percent this week to settle at Rs 216.40 per mmBtu on the MCX. The energy price fell in three out of five trading sessions on the domestic bourse. The weather is expected to be warmer than normal over the next two weeks but not warm enough that it will impact cooling demand.
It has been trading higher than its 20, 50, 100 and 200 days’ moving averages but lower than the five-day moving average on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 57.66, which indicates upbeat momentum in the prices.
The EIA reported that the US natural gas inventories increased by 71 billion cubic feet (Bcf) for the week ended May 7 as against market expectations of a 71 Bcf rise. Natural gas in storage was 2,029 Bcf as of May 7, 2021.
Gas demand for the residential sector increased to 89.1 billion cubic feet (Bcf) per day compared to 84.8 Bcf in the preceding week, while the industrial sector has been higher at 22.1 Bcf/d on a weekly basis, according to PointLogic Energy.
“Fundamentally for the weeks ahead, we are estimating MCX Natural Gas futures to trade volatile in expectancy of steady supplies, mixed demand/usage and a small rise in inventories observed on a weekly basis,” said Sunand Subramaniam, Senior Research Associate, Choice Broking.
In the futures market, gas for May delivery touched an intraday high of Rs 221 and an intraday low of Rs 215.80 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 184.10 and a high of Rs 222.90.