Wednesday, 17 November 2010

Coal's Two-Year-High May Force European Utility Gas Switch: Energy Markets

Coal in Europe is trading close to a two-year high as rising demand in China
drives up prices around the world, making natural gas more attractive to
U.K. and German utilities for producing power. Benchmark coal for delivery next month in northwest Europe reached $108.50 a
metric ton yesterday, the highest level since Nov. 7, 2008, according to
broker data compiled by Bloomberg. China faces "a moderate shortage" of the
fuel that generates 80 percent of its electricity after temperatures fell
below freezing earlier than usual this year, New York-based Commodore
Research said on Nov. 15. "Coal prices are now completely driven by Asian demand, and European
utilities have to accept that price," said Emmanuel Fages, a Paris-based
analyst at Societe Generale.

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