As the NYMEX gas futures contract has clawed back from its lowest settlement in 11 years, coal could be well positioned in some regions to regain a portion of the power-generation market share going into summer, traders and analysts say.
The NYMEX June contract settled at $2.647/MMBtu Thursday, up 74 cents, or nearly 39%, from when it settled at $1.907/MMBtu on April 19. Platts' June coal assessments Thursday, meanwhile, pegged Central Appalachian barge and rail prices at $54.50/st and $53.75/st, respectively, or roughly at an MMBtu equivalent of $2.27/MMBtu and $2.15/MMBtu.
Powder River Basin thermal coal was assessed Thursday at $8.15/st, or roughly 46 cents/MMBtu.
Effectively, the discount that had opened up for gas against Central Appalachian coal -- used predominantly in the largest coal-to-gas switching region of the Southeast and one of the largest switching states, Ohio -- at the end of March has all but dried up, a Platts analysis shows.
Hey dude, prices go up and down all of the time, so your eyeballs are only looking at the ticker, thay are by now loose. If you are watching the tics as a loosing commodities player, that's your problem.
The fact is that NG moved up over its lows under $2, and with rig counts down, and NG Liquids down, NG production will not keep up with increased demand. Moast of the fracked shale production of NG had a break even over $4, and coal OXF coal is cheaper than gas over $3.