• 6 minutes Corporations Are Buying More Renewables Than Ever
  • 17 minutes WTI @ 67.50, charts show $62.50 next
  • 23 minutes Starvation, horror in Venezuela
  • 22 hours Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 1 day Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 21 hours Renewable Energy Could "Effectively Be Free" by 2030
  • 22 hours Saudi Fund Wants to Take Tesla Private?
  • 1 day Mike Shellman's musings on "Cartoon of the Week"
  • 2 days Venezuela set to raise gasoline prices to international levels.
  • 2 days The Discount Airline Model Is Coming for Europe’s Railways
  • 1 day Pakistan: "Heart" Of Terrorism and Global Threat
  • 1 day Are Trump's steel tariffs working? Seems they are!
  • 2 days Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 3 hours Hey Oil Bulls - How Long Till Increasing Oil Prices and Strengthening Dollar Start Killing Demand in Developing Countries?
  • 15 hours Why hydrogen economics does not work
  • 14 hours China goes against US natural gas
Alt Text

Thermal Coal Prices Are Soaring

With tight supply in key…

Alt Text

Why China’s Shale Boom Is Struggling

China’s shale revolution has received…

Alt Text

The Billion Dollar Bet On European Coal

A Czech energy tycoon is…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Trending Discussions

Is Coal the New Black Gold?

After the halting and starting three week rally we have seen in stocks, I would be negligent to recommend equity plays here. But there is one sector you should add to your "buy on meltdowns" list and that is King Coal.

Demand from emerging markets, especially metallurgical coal needed to make steel, is absolutely exploding. Industry experts say a major super cycle of buying from China, South Korea, Japan, and Taiwan that is creating a long-term structural shortage for the black stuff. One of the reasons Warren Buffet's Berkshire Hathaway acquired the Burlington Northern Railway (BNR), was that it obtains 75% of its earnings from transporting coal to west coast ports for shipment to Asia.

The US currently derives 50% of its power generation from burning coal, and that dependence isn't changing any time soon. The only potential drag is the subterranean price of natural gas, to which many coal burning utilities may switch, if prices fall further. Not only do power companies have the environmental incentive to switch to relatively clean burning CH4, it is also cheaper on a dollar per BTU basis. However, this only affects the domestic demand for coal, not the foreign markets.

If the Republicans win the November elections, a regulatory back off will deliver a sudden boost to profitability, and you can count on perceptions to front run that. The new cost of recent regulations brought in by the Obama administration has already been priced in to these stocks. Some of the premier names to look at here include Peabody Energy (BTU), Massey Energy (MEE), and Joy Global (JOYG).

By. Mad Hedge Fund Trader




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News