Coal news and updates

BB&T Capital Markets analyst Mark Levin thinks so. With U.S. production falling earlier this year to its lowest level in a generation, investors are betting the worst is over, Levin said Wednesday in a note to clients. Some coal stocks are rallying as a recovery in natural gas prices brings the power-plant fuels closer to parity.

“Markets are a forward-looking mechanism, and what they are saying right now about coal in 2017 is bullish,” Levin said.

Coal bulls face daunting challenges. Miners unearthed less of the fuel in the first quarter than any time since 1981, according to the U.S. Energy Information Administration. At current output levels, they’ll extract 630 million tons this year, Levin wrote, down 30 percent from a year ago -- coal’s worst 12 months in decades. No region has escaped the collapse as gas cements its place as the country’s top fuel for electricity production.

Still, gas futures have climbed almost 60 percent since early March. That has made coal mined in the Powder River Basin of Wyoming and Montana and, to a lesser extent, in the Illinois Basin, more cost competitive, said Andrew Cosgrove, an analyst at Bloomberg Intelligence.

Since early April, weekly U.S. coal production is up 26 percent, the EIA said Thursday.

Source: bloomberg.com