The hostilities in Iraq have driven up the price of oil and natural gas securities. The exchange traded funds for oil, United States Oil (NYSE: USO), and natural gas, United States Natural Gas (NYSE: UNG), are both up in recent market action. So are stocks in the industry such as ConocoPhillips (NYSE: COP) and Chesapeake Energy (NYSE: CHK).
It is also a bullish period for coal securities such as Market Vectors Coal (NYSE: KOL), the exchange traded fund for coal, and Peabody Energy (NYSE: BTU), the largest coal company (chart below).
Peabody Energy is up 2.63 percent for the last week of market action. For 2013, it is down more than 13 percent. Off by more than 3 percent for 2014, Market Vectors Coal has jumped over 1 percent for the last week of trading. Even with The War on Coal from The Obama Administration, investors still see the value in the industry, especially when the prices of oil and natural gas are rising!
It is the same story for other securities in the coal sector.
When the price of oil and natural gas rises, it makes coal more attractive. That keeps more utility plants and other end users from switching over to oil and natural gas. The price factor adds to the other more appealing features of coal, such as ease of use and transport.
What is bullish for coal of a more positive nature is that China, the world’s biggest consumer, continues to grow,
The same is true for India, another major user. China and India are the world’s two most populous nations. Neither has the infrastructure to accommodate massive imports of natural gas. Oil is too expensive. For both businesses and consumers, coal is the best fuel sources in China, India, and many other emerging market nations.