- Most utilities that are able to switch to cleaner burning and cheaper natural gas already have done so, BB&T Capital said in a new report that may have helped propel coal company stocks (NYSEARCA:KOL) to big gains today.
- Newly implemented federal regulations prompted closures of several coal-fired power plants in 2015, and natural gas prices that have dropped 37% in the past year made that fuel more attractive than coal for electricity generation.
- "The good news is that we can’t even fathom a fall in coal demand in 2016 that resembles anything like what happened in 2015,” BB&T's Mark Levin writes.
- The worst case for coal next year is for demand to slide another 2%-4% rather than the 10% drop suffered in 2015, according to Levin, but Bloomberg analysts warn that coal producers may want to brace themselves as the flood of cheap gas flowing into power plants shows no signs of receding.
- In today's trade: BTU +34.9%, ACI +33.3%, CLD +6.6%, ARLP +3.1%, CNX +1%, WLB -0.5%.