Here’s a premise for you: it’s all about energy this morning.
The Financial Times runs an interesting piece on how the disaster that killed 25 miners at a Massey Energy (MEE) mine in West Virginia this week is destined to increase scrutiny of coal operations in the US, with the FT’s Kate Mackenzie pointing out that “Now that natural gas, which burns cleaner than coal, is looking increasingly abundant, not to mention cheap the last thing the coal industry will want is a bout of bad publicity on safety.”
The FT’s Peter Smyth makes the connection to China’s own mining disasters, of which there was one just days before the Massey incident that cost 32 lives. As a result of mine problems, China shut down numerous mines last year, with he result at China became a net importer of coal for the first time ever. That’s prompted he $3.6 billion hostile bid by the US’s Peabody Energy (BTU) for Australia’s MacArthur Coal, which is a leader in coal used in the coking process for making steel, which is obviously of interest if China’s factories are the dominant consumer in the region.
Dalhman Rose analysts this morning released a report on coal noting that the market for coal used in steel production has been “astonishing” in the past month, with a $200 price tag per metric ton of the stuff, something once unheard of.
Meantime, the FT’s Gregory Meyer and Michael Mackenzie wonder if triple-digit oil prices will soon become the kiss of death for nascent global economic recovery. One saving grace for the US: increased refining capacity in this country in recent years could prevent prices from soaring at the pump.
May futures for light sweet crude oil are up 29 cents, at $85.68 par barrel. October futures are up 90 cents at $88.99 per barrel. None of the contracts show a three-digit price, yet.
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