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Peabody Energy Corporation Message Board

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  • southbuckeye southbuckeye Apr 5, 2012 10:52 AM Flag

    nat gas too cheap to meter coal too costly to clean up after.......

    Run: what are you doing re: Peabody based on the info. you provided in your posting?

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    • 1) I understand now what was meant by "meter coal".
      2) Point that futures prices may be stabilizing a bit
      3) SPOT may show further stabilization with the next report ( ... forgot to include in prior post.

      I am long BTU after cashing out 75% of my Arch Coal. I believe Peabody is oversold. I live in St. Louis (home to Peabody, Arch and Patriot) and have many friends that work domestically and internationally at Peabody.

      The actual projection for a change in Coal->NatGas in the US over the next 8 years is only a total of 10% (1.3% reduction per year, not a market crash as some believe). Ref from Moody's this AM posted on Scottrade:

      Moody's Sees Broad Impacts From Natural Gas In Coming Years
      1 hours 36 minutes ago - Dow Jones News


      Moody's Investors Service expects natural-gas prices will remain low beyond next year, resulting in broad changes for the U.S. energy and railroad sectors over the next decade.
      Natural gas prices have been languishing around 10-year lows and continue to erode margins at power companies with generating units which sell electricity at market rates such as Exelon Corp. (EXC), FirstEnergy Corp. (FE) and PPL Corp. (PPL), Moody's said.
      Jim Hempstead of Moody's said, "Coal will find it increasingly difficult to compete with gas as a power source over the next decade," and Moody's anticipates that producers will continue to shift their focus toward exports.
      The retirements of coal-powered electricity generating plants that are being planned amid tougher emissions regulations, are likely to cut demand from the sector by as much as 10% between this year and 2020. Moody's noted that Peabody Energy Corp. (BTU), Arch Coal Inc. (ACI), Consol Energy Inc. (CNX) and Cloud Peak Energy Inc. (CLD) are among those already securing additional port capacity.
      Falling domestic coal demand also is expected to spur changes in the railroad sector, where it has been one of the industry's biggest commodity categories. Union Pacific Corp. (UNP) and Burlington Northern Santa Fe stand to benefit from increased exports from western coal producers, while CSX Corp. (CSX) and Norfolk Southern Corp. (NSC) are seen as benefiting from increases in Illinois Basin and met coal production in the east, Moody's said.
      New natural gas pipelines to connect production for alternative shale plays to markets will create new competitive risks in the pipeline sector, with companies with assets close to the shale regions likely to benefit.
      --By Tess Stynes, Dow Jones Newswires; 212-416-2481;
      (END) Dow Jones Newswires
      04-05-12 0957ET
      Copyright (c) 2012 Dow Jones & Company, Inc

24.35+1.37(+5.96%)2:29 PMEDT