Financial Daily from THE HINDU group of publications
Sunday, Oct 23, 2005
Financial Daily from THE HINDU group of publications Sunday, Oct 23, 2005 |
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Industry & Economy
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Petroleum BPCL keen on trading in NCDEX natural gas futures — Ties up for collaboration on furnace oil contracts Pratim Ranjan Bose
Kolkata. Oct. 22 AFTER furnace oil futures, the state-run BPCL is taking keen participatory interest in natural gas futures trading on the National Commodity & Derivatives Exchange Ltd (NCDEX). The oil marketing major has interest in natural gas through its stake in Petronet LNG. NCDEX, on the other hand, is planning to launch the three-day spot contracts in natural gas in collaboration with GAIL. Sources in the commodity exchange said already adequate progress had been made in creating the trading platform and a formal approval from GAIL was awaited. A senior BPCL official admitted that the company has interest in participating in natural gas trading but was waiting for the creation of a suitable platform. The company has in place a risk management desk and is exploring various means to hedge the trading risks in both the crude oil procurement and refined product trading. Already participating in the OTC trading platforms for refined products, it is closely watching the future contracts launched by MCX and NCDEX at home. Both the futures offer opportunities for hedging the risks for crude oil price fluctuations faced by the refiners. Furnace oil: Meanwhile, BPCL has finalised its collaboration with NCDEX on furnace oil futures to be launched on October 24. The futures will be inaugurated by the BPCL Chairman, Mr Ashok Sinha, who will also enter into an agreement with NCDEX on the same day on providing warehousing support for enabling physical delivery of the product. According to NCDEX sources, a large number of industrial consumers have shown interest in the contract as they are keen to lock in their future furnace oil price exposure. To be launched in both three- and six-month settlement modes, the furnace oil contracts are also expected to interest the short-term traders and price view taker as the volatility of the commodity is high and records an annualised fluctuation up to 45 per cent.
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