Natural gas speculators shift to bullion, crude oil

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Jhon Kumar
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Natural gas speculators shift to bullion, crude oil

Post by Jhon Kumar » Wed Jul 30, 2014 11:19 pm

Natural gas, which has gained significant speculative attention six months ago on the Multi Commodities Exchange (MCX), has now lost the luster with sharp fall in prices. On New York Mercantile Exchange, which was around $6.15 a mBtu as on February 19, 2014, dropped sharply to current level of $3.73 a mBtu, while at the same time domestic price on the MCX was around ` 386.20 a mBtu as on February 20, 2014, almost both International and domestic prices have fallen more than 40 per cent. In the current month, it has dropped almost by 15 per cent to close on Wednesday at ` 229.5.

Traders are waiting for Prime Minister Narendra Modi’s visit to the US in September, a major LNG (liquefied natural gas) exporter. Trade and industry expect the US will agree to sell LNG to India by exempting it from the requirement of compulsory free trade agreement (FTA). LNG imports from the US are largely dependent on approvals from the department of energy, Federal Energy Regulation Commission and clearances from various departments of the US. Approval of Department of Energy is crucial as it pertains to export of LNG to countries which have a free trade agreement with the US and, or nations which have not signed FTA with the US but are not covered under any sanctions for trade relations.

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