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CAPP Coal vs. NYMEX NatGas Btu Spread Bearish For NatGas

|Includes: The United States Natural Gas ETF, LP (UNG), USO

The CAPP Coal to Nymex NatGas Btu futures spread indicates that coal to gas substitution will end this Nov’09. That is roughly 2.1 bcf/d of NatGas demand that will be lost which will only add more to the already bearish imbalance of +3 year over year supply-demand (as of WE 6/12). This analysis implies downside risk to the current forward curve of NatGas.

Disclosure: No Positions