Natural gas prices fall 19% from multi-year highs in US; why and what it means for India

Thanks to its strong domestic supply, the country has mostly avoided falling into external energy dependencies like Europe, India and China. What had concerned analysts and experts was the low stockpile of natural gas, which is widely used by residents to warm their homes in the winter.

However, with the start of the autumn season in the US, and temperatures higher than usual, the fears of a shortage seem unfounded for now. The US Energy Information Administration said it received 33 percent more surplus natural gas than expected for its stockpile. This continues the weekly positive numbers of surplus gas, with the stockpile deficit shrinking to just being 4.2 percent.

With the weatherman forecasting a warmer-than-usual winter for the country, natural gas prices are not expected to see a huge upswing. Prices are expected to increase, but moderately, as deep winter sets in and heating needs rise.

Lower prices in the US, however, will not offer much relief to the rest of the world. With European stockpiles still critically low in many areas, much of the excess natural gas is expected to be bought by European markets.

Also read: Climate change pushes New Zealand to warmest recorded winter

For India, the trend in the US will have minimal impact on fuel prices. With the country producing a majority of its natural gas domestically, and not importing from the US, the price fall is not expected to affect domestic prices. Indians mostly use natural gas for cooking.

Also read: India hikes domestic natural gas prices, here's why