Baby it's cold outside! Yes the holidays are back and cold weather gripping much of the U.S. is causing shorts to cover positions in natural gas. The rise in natural gas prices may even start to make coal-fired plants more economical. That view could go mainstream if the EPA decides to officially give states some flexibility in meeting new standards for coal fired plants. This has me thinking the recent rally in coal stocks such as Walter Energy (WLT +0.00%), Peabody Coal (BTU +0.00%) and Alpha Natural Resources (NYSE: ANR) may see continued upside. That could also mean that investors should look at putting some coal in their Christmas stockings this year, even shares of out-of-favor Arch Coal (NYSE: ACI).
The move above $4/mcf for natural gas looks likely to gain more momentum with any continued winter deep freeze, but the real story may be the return of coal
About the Author
John Licata is the Founder & Chief Energy Strategist of Blue Phoenix Inc. and the author of “Lessons from Frankenstorm: Investing for Future Power Disruptions”, a 2013 Wiley e-book on the future of energy post Sandy. His ability to cross-pollinate idea generation and analysis of both traditional and unconventional global energy markets has been documented in the global media for north of a decade by the likes of Bloomberg, CNBC, BNN, Yahoo! Finance, Reuters Insider and Fox Business Channel.
John is a proven Strategist with over fifteen years of commodity research experience and unique content creation which has made him a highly sought out public speaker for viewpoints related to the future of energy. Prior to launching Blue Phoenix Inc. in 2005, John held research and trading positions at Dow Jones, Salomon Smith Barney, BrokerageAmerica and on the floor of the New York Mercantile Exchange (NYMEX).
John graduated from Saint Peter’s University with a B.S. in Economics and he received his M.B.A. from the Executive MBA Program at NYU’s Leonard N. Stern School of Business.