Natural gas price slumps 5%

Price of natural gas slumped up to 5 per cent on Thursday after three days of upward movement on Multi Commodity Exchange of India (MCX).

The highest upsurge was witnessed on Tuesday when the price shot up by 8 per cent.

At present, natural gas is quoted at Rs 348.10 per mmbtu as against Rs 270.20 per mmbtu on the launch of the contract on MCX on July 10. Since the launch, the price has surged about 30 per cent. Rising prices have attracted more traders towards futures.

Total trade volume on July 10 was recorded at 1160.50 thousand mmbtu which reached all-time high at 12842.50 thousand mmbtu. The volume marginally fell on Wednesday to 12662.50 thousand mmbtu.

As a consequence of higher trade, the exchange recorded the highest trade on August 1 which touched Rs 481.64 crore for August futures as compared to a meagre Rs 11.61 crore on July 10.

"The price of natural gas is estimated to go up further due to hurricane prediction, extra odd weather in the US which requires more power generation and lowering inventories," a trader said. The inventory level in the US has come down to 7 bcs as comapred to the normal level of 10 bcs.

India imports about 25 per cent of its consumption of 100 mmscmd (metric million standard cubic metre per day) from the countries including Algeria, Qatar, Australia, Malaysia etc.

Asia accounts for much of the growth in natural gas demand projected for the non-OECD region. Led by demand in China and India, natural gas consumption in non-OECD Asia has been growing at an average of 5.1 per cent since 2003.