Natural gas is widely used for electricity, heating, and industrial purposes. It’s actively traded in commodity markets, with prices influenced by many factors. For traders, the base value of both natural gas options and futures is quoted in rupees per mmBtu, with a standard lot size of 1,250 mmBtu.
Introduction
Natural gas is a crucial component of the global energy mix, serving as a primary source of energy for households, industries, and power generation. Its significance has grown over the years, not just as a cleaner alternative to coal and oil but also as a vital commodity in the global economy.
There are an estimated 900,000 km³ of unconventional gas resources, such as shale gas, with around 180,000 km³ potentially recoverable. Natural gas is expected to play a growing role in electricity generation and heating. The South Pars/North Dome Gas-Condensate field, shared by Iran and Qatar, is the world's largest, containing an estimated 51,000 cubic kilometres of natural gas and 50 billion barrels of condensates.
Factors that Impact Natural Gas Market/Price
The price of natural gas is influenced by several factors, which include:
- Demand: Natural gas prices rise when demand outpaces supply and fall when supply exceeds demand. Factors like weather changes, economic growth, and the availability of other fuels influence demand, affecting prices on the exchanges.
- Supply: Supply levels also play a key role in pricing. Higher supply than demand typically lowers prices, while tighter supply drives them up. Key influences include production levels, storage amounts, and import/export volumes, all of which impact MCX natural gas prices.
- Economic Growth: A growing economy increases the demand for energy, including natural gas, driving up prices. Conversely, reduced industrial activity can lower demand and prices during economic downturns.
- Weather Conditions: Extreme weather conditions, such as cold winters or hot summers, can significantly affect natural gas prices due to increased demand for heating or cooling.
- Geopolitical Events: Political instability in natural gas-producing regions can disrupt supply, leading to price volatility.
- Storage Levels: The amount of natural gas in storage can also influence prices. High storage levels can indicate an oversupply, leading to lower prices, while low storage levels can signal scarcity and drive prices higher.
Things to Consider Before Trading in Natural Gas
- Market Volatility: Natural gas prices can be highly volatile due to various factors, including weather conditions, economic data, and geopolitical events. Investors should be prepared for price swings and manage their risk accordingly.
- Understanding Storage Reports: Natural gas storage reports are released weekly and can significantly impact prices. Investors should understand how to interpret these reports and their implications for market dynamics.
- Leverage: Trading natural gas futures contracts often involves the use of leverage, which can amplify both gains and losses. Investors should carefully consider their risk tolerance before using leverage.
- Regulatory Environment: Changes in government regulations, environmental policies, and energy standards can impact natural gas prices. Investors should stay informed about regulatory developments that could affect the market.
Natural Gas Expiry Date Calendar 2024
Contract launch calendar for natural gas options and futures (1,250 MMBtu) for the year 2024
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Contract Month
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Contract Launch Date (Options)
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Contract Expiry Date (Options)
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Contract Launch Date (Futures)
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Contract Expiry Date (Futures)
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May-24
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February 27, 2024
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May 24, 2024
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February 12, 2024
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May 28, 2024
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Jun-24
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March 26, 2024
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June 21, 2024
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February 12, 2024
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June 25, 2024
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Jul-24
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April 26, 2024
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July 24, 2024
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February 12, 2024
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July 26, 2024
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Aug-24
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May 29, 2024
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August 23, 2024
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February 27, 2024
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August 27, 2024
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Sep-24
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June 26, 2024
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September 23, 2024
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March 26, 2024
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September 25, 2024
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Oct-24
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July 29, 2024
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October 24, 2024
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April 26, 2024
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October 28, 2024
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Nov-24
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August 28, 2024
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November 21, 2024
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May 29, 2024
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November 25, 2024
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Dec-24
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September 26, 2024
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December 24, 2024
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June 26, 2024
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December 26, 2024
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How to Trade in Natural Gas via Angel One?
To trade natural gas via Angel One, follow these steps:
- Open a demat and trading account: Start by opening a demat and trading account with Angel One.
- Activate the commodity segment: Once your demat account is set up for trading, ensure the commodity segment is activated to start trading in natural gas contracts and other commodities.
- Stay informed: Monitor live natural gas prices, market movements, and news that could impact the market by following exchanges like MCX (Multi Commodity Exchange).
- Execute your trades: Use the Angel One trading platform to place your trades according to your strategy.
- Implement risk management: Protect your trades by using risk management tools such as stop-loss orders to minimise potential losses.
