For many decades, energy, whether renewable energy or fossil fuels, has been used as an indispensable product. Energy has always been essential for human survival. There are multiple types of energy commodities available in the market. The commodities hold different prices and values, based on their availability, usage, and power. From our page, you can get the entire overview regarding commodity sections like bullion, base metals, and energy. Under the energy section, there are crude oil and natural gas. Previously, we covered crude oil; today’s focal point is on natural gas. Here, we provide a live natural gas price chart along with an analytical overview.
How to Use These Widgets
Before proceeding further, let’s just have a look at a short description of the term “energy”. Literally, energy means a power that is derived from the utilisation of either chemical or physical resources. Through the utilisation of energy, we can fulfil our daily requirements of light, heat, or machinery work. As we’ve mentioned above, there are separate forms of energy. Among them are a few forms of energy, such as sound, chemical, radiant, electric, atomic, and mechanical.
Indian Commodity Exchange Market
Those who deal with the market and investment must be acquainted with the exchange-traded market. There are two types of markets: one is over the counter, and the other is the exchange-traded market. In a SEBI-regulated exchange market, there are both commodities and equity exchanges. The commodity exchange controls and maintains the entire transaction process between buyers and sellers. Among various regional and national commodity exchanges, there are MCX (Multi Commodity Exchange), NCDEX (National Commodity and Derivates Exchange), and ICEX (Indian Commodity Exchange). NMCE (National Multi-Commodity Exchange), etc. Generally, MCX is one of the most widely used exchanges in the Indian Commodity Market.
Natural Gas as Energy
Natural gas is a combination of different gases. These gases (nitrogen, methane, carbon dioxide, etc) are rich in hydrocarbons and are naturally found in the atmosphere deep inside the earth. In order to get the power from the natural gas, it must be processed and converted. We can not use Natural Gas in its raw form. One of the main and primary usages of natural gas is generating heat and electricity. We will describe the various uses of natural gas later. The usage includes domestic, industrial, and business. Before that, let’s have a look at the live natural gas price chart, natural gas price support, and resistance.
Usage of Natural Gas
Natural gas comes under the category of non-renewable energy (which means it cannot be replenished). So, among its variety of uses, there are mainly residential, industrial, and commercial applications. Therefore, let us describe the list of usages below:
Residential Usage
- Almost in every domestic residence, people use natural gas as the main component of cooking gas.
- One of the primary uses of natural gas is to generate electricity.
- Apart from the above usage, it is applicable in heating, dryers and other purposes.
Industrial Usage
- There are numerous industrial uses of natural gas, like manufacturing, heating, electricity generation, etc. Industries like steel and paper apply natural gas to generate steam and heat for production purposes. Other industries such as plastics, fertilizers, synthetic fibres, medicine, cosmetics, etc., use natural gas as a primary component.
- Almost all industries require electricity and heat for production and manufacturing purposes.
Other Usage
- Since 1930, the use of natural gas has been to power vehicles. One of the main objectives of using natural gas in a vehicle is to reduce pollution and cost.
- In order to reduce costs in various segments, natural gas can be used. As its availability is easy, the usage cost of natural gas is low.
Reason to Invest in Natural Gas Commodity
According to the data of the US Energy Information Administration projects, global natural gas consumption is going to rise between 2010 and 2035 by 50 per cent. Hence, the reason behind the rise in the consumption of natural gas is the hike in demand.
- The huge demand for natural gas raises its value.
- In order to reduce pollution and the cost of transportation, people use natural gas.
Natural Gas in the Commodity Market
For its demand and value, natural gas plays a significant role in the commodity market. It is a profitable commodity product in the market.
However, the trading unit for Natural Gas in MCX is 1250 mmBtu. So generally speaking, the lot size of NG is 1250. So, 1 rupee of price movement in NG can fetch Rs. 1250 profits for a trader. Intraday traders generally trade for a 1-2 rupee profit.
If a trader can trade NG with 60% accuracy, and out of 5 trades, if he books 3 trades at 3 rupees profit, i.e., total profit booked = 3 x 3 = 9 points. And if he loses 2 trades, 1.5 points each, so the total loss is 2 x 1.5 = 3 points. Net profit in a week = 9 – 3 = 6 points. Net profit value = 6 x 1250 = Rs. 7500.
So a trader can safely earn his living by trading Natural Gas if he maintains a good risk-reward ratio. In general, NG is a slow mover in the MCX market. It also reacts heavily during inventory time. Hence, we advise traders to be cautious on the inventory day. However, you can use line break charts to trade volatile times.
Therefore, a broker like Zerodha requires around Rs. 22,000 to carry forward 1 NG contract positionally. However, in intraday trading, the margin requirement is much lower.
Conclusion
In conclusion, the price of Natural Gas can be quite unpredictable. It can fluctuate significantly and rapidly due to factors such as events, economic conditions and weather patterns. It is essential for natural gas investors to have an understanding of these market influences in order to make investment decisions. Similarly, individuals who are considering switching to gas as an energy source for their homes should keep themselves updated on the prices so that they can assess whether the advantages outweigh the costs. Overall, by conducting research, both potential investors and homeowners can carefully evaluate the implications of utilising gas.