After the recent plunge in WTI crude oil prices into negative territory, analysts now expect natural gas prices to stoop to a new low to near-zero, impacted by a sharp decline in demand.

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“Natural Gas is used as an alternate fuel. But with crude oil being cheaper, we expect the demand for the natural gas to witness a huge fall in the near future,” said Ajay Kedia.

However, no other commodity can see a negative price, analysts said.

Natural gas prices have fallen over 13 percent in the last 10 days on MCX. Demand for the gas has waned amid fallout from the coronavirus pandemic. The nationwide lockdown has hurt industrial demand for natural gas as their operations are closed or running below capacity.

Excessive availability, restrictions on usage due to the environmental concerns and cheaper alternatives are among the other factors that have impacted demand for natural gas.

Another commodity that can see a sharp plunge in prices is among the base metal i.e. lead.

Lead prices have fallen over 12 percent this year as it is the worst hit base metal due to slowdown in the global economy and contraction in demand from China.

“Lead is used in the batteries for electric vehicles (EV). But, lower demand for the EVs, especially from China, had significantly impacted the lead prices,” Kedia said.

Going ahead, regulators should constantly monitor the movements in the commodities market and increase the margins to safeguard brokers and client in an event of negative price, Kedia suggested.

He welcomed the recent moves by the exchanges which included strengthening their risk management framework and increasing the margins.

For investors, Kedia suggested to look for Agri commodities and bullion for investment and remain cautious on energy.