Lower PricesNatural gas turned weak on increased bearish bets
Jan 25, 2011 at 06:57 AM
Natural gas futures declined, erasing their earlier gains, in the domestic market on the back of tracking weak cues from the global market. January contract fell by Rs. 6, or 2.76%, to Rs. 211.10 per mmbtu on Multi Commodity Exchange (MCX) yesterday.
Natural gas for February contract declined 3.29% to $4.580 per British thermal units in New York Jan.24 after the Commodity Futures Trading Commission's weekly commitments of traders report that showed Producers and merchants increased net-short positions on natural gas futures and options by 9.6% to 36,245 for the week ended Jan.18 on speculation that natural gas supply may increase in near term. It was the largest net-short position since March 2008.
"Prices are going to go lower from here," said Jason Schenker, president of Prestige Economics, an energy advisory firm in Austin, Texas. "Given the fact that we have so much supply in inventories, we have a series of bearish factors set to drag prices lower."
At Multi Commodity Exchange (MCX), natural gas future for January contract closed on Monday at Rs 211.10, down by 2.76%, after opening at Rs. 218.00 against the previous close price of Rs. 217.10. It touched the intra-day low of Rs. 210.40 with a business volume of 41,508 lots. While, natural gas future for February contract closed at Rs. 213.60 after opening at Rs. 219.50 against the previous close price of Rs. 219.20. It touched the intra-day low of Rs. 213.60 with a business volume of 15,642 lots.
AT NYMEX, natural gas future for February contract closed yesterday at $4.580 per million British thermal units, down by 3.29%, after opening at $4.810 against the previous close price of $4.736. It touched the intra-day low of $4.557 with a business volume of 105,746 lots.
However, Managed money includes hedge funds, commodity pools and commodity trading advisers increased net-short positions by 39% to 85,584, according to CFTC report.