Sector Wrap: Analyst sees further hike for coal

NEW YORK – Coal stocks rose amid a battered broader market Wednesday, after a Stifel Nicolaus analyst raised his price expectations for the commodity next year as supplies are expected to dwindle.

The analyst predicted that coal prices – already driven by soaring international demand for steel production in China and India and electricity in Europe – will rise as supplies are eaten up in the U.S.

He projects coal supplies in the country will fall short of demand by about 15 million tons this year and about 11 million tons in 2009, leading utilities to turn to their stockpiles to fuel their plants.

Associated Press