Natural gas futures decline 0.4% on weak demand

Natural gas futures slipped to Rs 128.40 per mmBtu on May 22 as participants increased their short positions.

The US Energy Information Administration (EIA) reported that US natural gas inventories increased 81 billion cubic feet (bcf) for the week-ended May 16.

Liquefied natural gas (LNG) exports fell sharply due to weaker demand in the global market, but prices were supported at the lower level after US producers cut gas output and drilling activity.

In the futures market, natural gas for May delivery touched an intraday high of Rs 129.40 and an intraday low of Rs 127.60 per mmBtu on the Multi-Commodity Exchange (MCX). So far in the current series, natural gas has touched a low of Rs 121.70 and a high of Rs 163.80.

Natural gas futures for May delivery eased Rs 0.40, or 0.31 percent, to Rs 128.40 per mmBtu at 15:05 hours IST on a business turnover of 9,284 lots.

The same for June delivery gained Rs 0.50, or 0.36 percent, to Rs 140.90 per mmBtu on a business volume of 2,646 lots.

The value of May and June contracts traded so far is Rs 430.20 crore and Rs 37.83 crore, respectively.

Motilal Oswal sees support for natural gas at Rs 125-122 and resistance at Rs 132-134. The broking firm has advised its clients to sell on every rise.

At 09:39 (GMT), the natural gas slipped 1.11 percent quoting at $1.69 per mmBtu in New York.

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