• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 4 hours Shale Oil will it self destruct?
  • 2 hours NYT: Mass Immigration Roundups in U.S. to Start Sunday
  • 4 hours South Korea imports No Oil From Iran in June - First-Half Imports Fall 37%
  • 4 hours U.S. Adminsitration Moves To End Asylum Protections For Central Americans
  • 3 hours U.S.- Taiwan: China Says Will Freeze Out U.S. Companies That Sell Arms To Taiwan
  • 15 hours Rising air pollution and green house effect
  • 15 hours Starlink Internet Courtesy of Tesla
  • 1 day Panama revoked registrations of tankers flying under their flag that have not complied with sanctions. Most are Iranian tankers. Vessel seized in Gibraltar, Grace I, flying under Panamanian Flag. Registration revoked in May. England seizing justified
  • 24 hours Is This The End of BBQ?
  • 7 hours Germany exits coal: A model for Asia?
  • 18 hours Oil Price Could Fall To $30 If Global Deal Not Extended
  • 2 days Alliance: Ford - VW Extend Multibillion-Dollar Alliance To Electric, Automated Cars
  • 13 hours U.S. Economic Expansion: Rich Get Richer
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

Premium Content

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




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play