Coal outperforms energy rivals, earning title of other black gold

SAN FRANCISCO (MarketWatch) — Coal, whose price surge has already outrun those of crude oil and natural gas, is generating an even louder buzz as a rash of bad weather has reduced its production globally.

Citigroup earlier this week raised its forecast for thermal coal, saying it now expects prices for the benchmark product to double this year as blizzards in China, power outages in South Africa, and floods in Queensland cut into global output. Meanwhile, demand for coal keeps rising as the world’s electricity use expands.


Coal is poised to continue its rally as “tight markets are being further squeezed by new developments,” Alan Heap, an analyst at Citigroup, wrote in a research note.

Prices already have had a remarkable run. Thermal coal prices at Newcastle, Australia — an Asian benchmark for coal used in power generation — jumped 73% last year, beating crude oil as the best performing energy commodity.

MarketWatch