Natural Gas Versus Coal Back to Blog
Natural gas price futures for June 2013 settled at $4.15 per MMBtu, unchanged from the May closing price. The last time natural gas price futures settled above $4 per MMBtu, for two months in a row, was 18 months ago. The June 2013 settlement price was considerably more than the June 2012 settlement price of $2.42 per MMBtu. The decline in the number of U.S. gas-directed rigs has not decreased supply as natural gas supply is still 1.2% higher than a year ago. The price of coal is also pushing gas prices down (for now). If natural gas prices stay above $4 per MMBtu a switch from gas to coal may occur in the power generation sector. However, the President’s just declared war on coal through executive ordered environmental regulations may push the price of coal to new highs as existing factories are required to construct expensive clean technology and therefore push the cost onto its customers.