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Weekly US coal production rises despite low natural gas prices

Houston (Platts)--22 Feb 2018 530 pm EST/2230 GMT


Weekly US coal production totaled an estimated 15.57 million st in the week that ended February 17, up 2.8% from the prior week, but down 4% from the year-ago week, US Energy Information Administration data showed Thursday.

This was the second strongest year-to-date estimate behind the estimate for the week that ended February 3 at 15.87 million st.

EIA expects natural gas prices to moderate in the coming months, based on a forecast that production will reach a record 80.3 Bcf/d in 2018. With less-expensive gas, utility buyers are not moving aggressively to rebuild stockpiles.

S&P Global Platts Analytics estimates stockpiles stood at 107.43 million st for the week that ended Thursday, down roughly 1.5% from the year-ago week.

One reason for this downward trend is ongoing retirements, but with gas futures prices below $3 for 2018, buyers have been hesitant to make procurement decisions.

The front-month NYMEX Henry Hub gas contract settled Thursday at $2.659/MMBtu, up 2.6% from the year-ago price.

Based on EIA estimates through the first seven weeks of the year, annualized US coal production in 2017 would total 759 million st, down 1.6% from last year.

For the recently concluded week, coal production in Wyoming and Montana, which primarily comprises coal from the Powder River Basin, totaled an estimated 7.02 million st, up 2.6% compared with last week, but down 4.4% from the year-ago week.

On an annualized basis, coal production in Wyoming and Montana would total 341 million st, down 3.5% from last year.

In Central Appalachia, weekly coal production totaled an estimated 1.95 million st, up 3.7% from last week and 1.9% from last year. Annualized 2017 production would total 95.2 million st, up 6.3% from last year.

In Northern Appalachia, weekly coal production totaled an estimated 2.12 million st, up 3% from last week, but down 7.9% from the year-ago week. Annualized production would total 103 million st, down 1.2% from last year.

In the Illinois Basin, weekly coal production totaled an estimated 2.1 million st, up 2.3% from last week, but down 9.9% from last year. Annualized production would total 103.3 million st, down 0.1% from 2017.

--Veda Chowdhury, veda.chowdhury@spglobal.com

--Edited by Valarie Jackson, valarie.jackson@spglobal.com




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