Oil prices hit recent highs on Monday on OPEC deal hopes, but hit a snag on Tuesday as Iraq and Iran remain hesitant towards an output cut.
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• Natural gas has eaten away at coal’s market share in the electric power sector. But falling natural gas production and slightly higher hub prices could lead, at least in the short-term, to a stabilizing of coal’s position.
• The EIA projects natural gas-fired generation to cost more than coal generation in 2016 and 2017. Coal-fired power plants, as a result, could be called on more in the years ahead.
• But the decline of coal is explained by a lot more than just variable costs of generation. The age of a plant; maintenance and major infrastructure upgrades to old plants; lawsuits; regulations; and public relations all factor into the accelerated rate of coal plant closures in recent years.
• Still, coal will at least get a temporary market respite from higher natural gas prices.
• Sunoco Logistics (NYSE: SXL)
• Noble Energy (NYSE: NBL) and Delek Drilling (OTCPK: DGRLY) are
• Concho Resources (NYSE: CXO) agreed to
Tuesday November 22, 2016
Oil prices soared on Monday following news that OPEC is making progress on a deal to cut production. The potential breakthrough is coming from Iraq, which is widely seen as the most obstinate of all OPEC members (along with Iran), arguing that it needs higher production to pay for its war against the Islamic State. Iraqi officials said they will offer three new proposals at the technical meeting taking place this week in Vienna. The WSJ
Optimism on OPEC deal. On top of the new openness from Iraq,
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By Evan Kelly of Oilprice.com
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