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Response to liberal N proud (Reply #7)

Sat Nov 10, 2012, 01:58 AM

14. Not Seasonal

The Department of Energy projects coal production in the U.S. to decline by some 70 million tons this year. The main reason is because the cheap natural gas produced by fracking has become more economical for utilities than coal (this is on the cusp of changing back as natural gas prices have been rising).

DOE Short Term Energy Outlook: http://www.eia.gov/forecasts/steo/pdf/steo_full.pdf

Prices have dropped as a result of weaker demand. A number of coal companies have been closing mines until market conditions improve. If you want to verify this, just look up the 3Q earnings reports from the major coal companies.

I can't say for sure, of course, what is motivating Murray in particular. This is just a brief synopsis of general market conditions.

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