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Coal markets: Limiting gas price upside in 2013

Coal markets: Limiting gas price upside in 2013

Report summary

In North American gas markets, the worst of times appear to be over. Winter weather has been relatively normal, and the latest gas production figures finally point to declines. Additionally, gas storage withdrawals and observable power-sector gas burns suggest continued strong gas-fired generation levels, even as gas prices have risen from less than $3.25/mmbtu in late February to about $3.90/mmbtu currently. These bullish storage draws have, in turn, pushed gas prices up further. But in...

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  • Coal markets: Limiting gas price upside in 2013 PDF - 558.53 KB 9 Pages, 1 Tables, 8 Figures

Description

This Gas Markets Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For participants, suppliers and advisors who want to look at the trends, risks and issues surrounding this topic, this report gives you an expert point of view to help inform your decision making.

We provide detailed supply, demand and price forecasts based on our integrated upstream, power, coal and LNG research. Our regional gas experts are based in the markets they analyse, providing comprehensive analyses of regional and global gas markets.

If you want to understand complex gas market dynamics and plan for the future, Wood Mackenzie is the premier resource to help you gain a clear, competitive advantage.

  • Executive Summary
  • Where are we now?
  • Coal markets: Structural differences, costs, and trends
    • Coal market: How it's different from gas
    • Coal basins: How they're different from each other
    • Powder River Basin: Primary source of short-term coal production elasticity
    • Central Appalachia: High stockpile volumes could cushion market tightness
    • Illinois Basin: Growing low-cost capacity, but how much upside in 2013?
    • Northern Appalachia: Limited spare capacity
  • Short-term gas price outlook: Some upside, but not until winter
    • Appendix 1: Relevance of spot coal prices in dispatch

In this report there are 9 tables or charts, including:

  • Executive Summary
  • Where are we now?
  • Coal markets: Structural differences, costs, and trends
    • Table 1. Key characteristics of major coal-producing basins
    • Chart 1. Delivered Southeast coal cost structure
    • Chart 2. Delivered Midwest coal cost structure
    • Chart 3. PRB production and Henry Hub prices
    • Chart 4. Distribution of implied PRB rail rates
    • Chart 5. Coal production growth (vs. 2007)
    • Chart 6. Coal production outlook
  • Short-term gas price outlook: Some upside, but not until winter
    • Chart 7. 2013 incremental coal-gas displacement by gas price range
    • Chart 8. Gas price outlook and risks
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