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Alliance Resource Partners LP Message Board

  • johnbarryegan johnbarryegan Oct 14, 2008 6:58 PM Flag

    Re: Goldman Sachs call for Coal prices 2009

    Well... They got $150 a barrel oil right, but blew it on $200 a barrel.. So take his with a grain of salt... jegan ;-)
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    Goldman said it still expects summer 2009 NYMEX natural gas to price at parity with coal, but at lower levels.

    "We still expect US natural gas to price at parity with Appalachian coal during summer 2009 in order to incentivize coal-to-gas fuel substitution and rebalance the market. However, Goldman Sachs JB Were has just downgraded their Newcastle (thermal) coal price forecast for 2009, on which we base our Appalachian coal price expectations, in response to softer European demand for coal."

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    • Currently, appalachian coal spot prices are about $133/ton. So, you can get about 190,000 BTUs per $ with coal. The equivalent prices for natural gas is around $5.10 per mcf.

      Of course, this is on a spot price basis. Longterm contracts for coal are more like $70/ton. This gets you an equivalent of about $2.80 per mcf. So, is natural gas going that low?

      If so, I would think that Boone Pickens will become even more mega-rich. People will jump to cng in cars overnight.

      • 1 Reply to norris_3845
      • I heard Boone is having to liquidate a lot of his holdings in CLNE ... And I read he has a **big** outflow from his fund.... Also, I live in California and he's pumped a lot of cash into backing a Statewide proposition to fund natgas for cars. **Unfortunately** California is begging for money right now and the major newspapers are stating 'vote no!' on the proposition. I'm fairly confident that California won't pass the proposition and Calif tends to lead the Nation with these types of things. Lets face it, we can't afford it. If Boone has to pay off withdrawals from his fund, then you might see him join the ranks of us peons.... Well ... Probably not..

        jegan ;-)

 
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