Natural gas futures eased to Rs 207.60 per mmBtu on February 12 as participants built up short positions as seen by the open interest. Natural gas price had fallen 1.5 percent on February 11 on the NYMEX.

Natural gas extended losses after a gap-down open in the afternoon session, tracking weak global cues.

Kotak Securities said natural gas is struggling to break past the $3/mmBtu levels and with mixed cues choppy trade is likely. However, buy on dips is recommended as cold weather may keep demand high.

The US Energy Information Administration (EIA) reported that US natural gas inventories fell by 171 Bcf for the week ended February 5 as against markets expectations of 181 Bcf decline.

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“The trajectory of inventories continues to be downward sloping and the cold weather in the US will likely take stockpiles down to the average of the last 5-years soon. Natural gas has support at Rs 206 and below it may come down to Rs 197 levels,” said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited.

MCX iCOMDEX Natural Gas Index was down 18.71 points or 0.72 percent to 2,590.40.

In the futures market, natural gas for February delivery touched an intraday high of Rs 209.30 and an intraday low of Rs 206.20 per mmBtu on MCX. So far in the current series, natural gas has touched a low of Rs 169 and a high of Rs 223.20.

Natural gas delivery for February dropped Rs 1.60, or 0.76 percent, to Rs 207.60 per mmBtu at 14:30 hours IST with a business turnover of 10,972 lots.

Natural gas delivery for March slipped Rs 0.90, or 0.43 percent, to Rs 206.10 per mmBtu with a business volume of 2,662 lots.

The value of February and March’s contracts traded so far is Rs 1,051.60 crore and Rs 36.55 crore, respectively.

Geojit Financial Services expects choppy trading inside Rs 222-198 levels and breaking any of the sides would suggest fresh short term directions.

At 09:04 (GMT), the natural gas price lowered 0.21 percent quoting at $2.86 per mmBtu in New York.