September 5, 2024 - Relatively high coal stocks at U.S. power generators could indirectly influence natural gas demand this fall if gas prices rise and tilt costs more in favor of coal.

“Elevated coal stockpiles are an indirect driver of lower natural gas prices,” EBW Analytics Group senior analyst Eli Rubin wrote in a recent note. “Should bullish catalysts send natural gas higher, an oversupplied coal market could facilitate power sector gas-to-coal switching and diminish power sector gas burns.”

U.S. coal stockpiles calculated as a “days of burn” on hand remain above Covid-19 pandemic highs for higher-heat bituminous coals, Rubin said, citing U.S. Energy Information Administration (EIA) data through June.