Natural Gas Prices Rebounding?

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Via WSJ:

Some  investors are wagering on natural-gas prices losing their spark.  Natural-gas prices have jumped as much as 44% since sinking to decade  lows last month. Much of that rally had been powered by rising demand  from utilities, which had taken advantage of the low prices by using  more natural gas instead of coal. But the higher prices are making coal  competitive once again. Coal prices are down 22% since the start of the  year. Utilities are continuously fine-tuning how much coal and natural  gas they’re burning to generate electricity. In recent months, they’ve  increasingly favored natural gas due to the steep drop in gas prices.  Utilities keep the breakdown of their fuel use a trade secret. How  utilities will respond to higher gas prices has spurred debate among  investors. Some analysts and traders say the rally threatens to erode  natural gas’ recent gains in market share as utilities switch back to  coal, and that could limit any further price increases.

If prices continue to tick up, expect more fracking.

This entry was posted in Environment.

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