Natural gas futures dropped to Rs 197.2 per mmBtu on January 7 as participants increased their long positions as seen by the open interest. Natural gas price had gained 0.52 percent yesterday on the NYMEX.

Natural gas prices extended decline in the afternoon session after a gap down opening and traded near day’s low.

Natural gas prices rallied in the last few days on strong LNG exports, flat production and forecast of colder weather increasing residential heating demand.

Market participants will take a further cue from US Energy Information Agency weekly inventory report later in the day.

MCX iCOMDEX Natural Gas Index fell 49.31 points or 1.99 percent to 2,430.96.

Kshtij Purohit, Product Manager Currency & Commodities, CapitalVia Global Research Limited said, “Natural gas has traded positive but faces resistance at 50 Days SMA which is placed at Rs 203.30 levels during the last trading session. The day temperature outlook showing colder than expected temperatures likely across the Southeastern US is supportive for the natural gas prices.”

Natural gas has support at Rs 195-192 while resistance is at Rs 201-203, he said.

In the futures market, natural gas for January delivery touched an intraday high of Rs 201.40 and an intraday low of Rs 196.20 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 167.40 and a high of Rs 255.90.

Natural gas delivery for January fell Rs 4, or 1.99 percent, to Rs 197.20 per mmBtu at 14:29 hours IST with a business turnover of 9,684 lots.

Natural gas delivery for January slides Rs 3.60, or 1.81 percent, to Rs 195.60 per mmBtu with a business volume of 2,244 lots.

The value of January and February’s contracts traded so far is Rs 1,378.09 crore and Rs 46.09 crore, respectively.

Natural gas may remain sideways ahead of inventory report however we may note some gains if EIA reports a bigger than expected decline in stocks, said Kotak Securities.

At 09:06 (GMT), the natural gas price was down 1.18 percent quoting at $2.68 per mmBtu in New York.