| I never tracked them closely but NG per an MCF right now is by far the cheapest energy source around today it makes coal look expensive that is how depressed this commodity is. Looking @ oil to NG, oil never went much over 10 to 1 they are currently like 40 to 1. That just does not make a lot of sense for the fuel of the future to be trading that much cheaper. For them to be equivalent in energy they should trade more like 6 to 1 that would be 17 an MCF. ANR I believe is the largest producer of metallurgical coal, china loves this type of coal for producing steel it is better for there furnaces. The Chinese have been increasing there imports for this type of coal for the last few years. Looking @ proven reserves @ current world demand rates Oil has about 35-40 years, NG maybe 50-55 coal 80-100 years. So we will be needing all 3 to meet the world’s energy demands and if China and India continue to grow the way they are it will not take long for those 40, 50 and 100 year supplies to dwindle and cause huge spikes in price. They have what close to half the world’s population the USA has 300M people and consume the most oil in the world guess what happens when you have 2.5B people living better and better yikes. BAC said today they are looking to expand more in China, pretty much every company around the world is drooling over the Chinese consumer. Gee a 7.5% growth rate threw the commodities sector in a tailspin today, but the Chinese always under promise and over deliver that 7.5% means 8%-9%. Price determines everything with coal & ng prices this cheap to oil we with see all kinds of companies trying to find ways of using these guys they are what 60-80% cheaper to the energy equivalent, so demand is revving up. Also, nobody is going to keep producing there assets @ loses or selling them too cheap they will go out of business or it is just stupid, so cut backs will continue and development of future assets will be put off. So, you combine the 2 higher prices are just a few years away IMO. I personally like Natural gas much more than coal that is why it is a much bigger %, but it is hard for me to see a company like ANR with so many assets, and who is also solid financially to be trading down close to 90% from its highs just doesn’t make sense. We need all 3 especially after the Japan disaster. I am a strong believer oil will be 200 dollars or higher by 2020 that can only mean good things for NG and Coal @ these irrational prices. |
