Why can coal displace oil after a pandemic?


An analysis by Rystad Energy shows that coal is the only source of energy not affected by the current price crisis, OilPrice.com writes. This type of fossil fuel is believed to be able to only strengthen the position.


Coal prices fell even before the crisis, and now the petroleum products used in mining are cheaper, which, according to Rystad Energy, reduces production costs by a few dollars per ton.

A significant drop in the currencies of major coal exporting countries, such as Australia and Russia, is often a neglected factor in terms of coal prices and margins. In mid-March, the Australian dollar reached a seventeen-year low as international investors sought to withdraw into a safe US dollar.

The Russian ruble also reached new record lows due to falling oil prices. International coal trading is in dollars, while most of the production costs are usually expressed in local currency. Consequently, a lower exchange rate means higher local revenues or lower costs when converted to dollars.

A possible consequence of the Covid-19 crisis could be an unexpected shift in public opinion and policy in relation to the rate of transition to a low-carbon future in electricity generation. In the new post-pandemic world, coal, despite many problems, will prove to be a cheap and reliable source of energy for recovery economics.
  • Used photos: needpix.com
5 comments
Information
Dear reader, to leave comments on the publication, you must to register.
I have an account? Sign in
  1. Dmitry S. Offline Dmitry S.
    Dmitry S. (Dmitry Sanin) 23 March 2020 09: 53
    0
    Is this a sweet pill amid growing refusals to buy Russian oil? Will we sell coal?
    1. SASS Offline SASS
      SASS (Sass) 24 March 2020 15: 09
      0
      Still fools and prostitutes who love sweet pills on the background of saliva.
  2. Ivan Ivanov_18 Offline Ivan Ivanov_18
    Ivan Ivanov_18 (Troll trolls) 23 March 2020 10: 12
    -1
    Kitchen garden, elderberry, Kiev, uncle.
  3. Bulanov Offline Bulanov
    Bulanov (Vladimir) 23 March 2020 11: 45
    +1
    A bucket of coal is easier to heat a house and cook dinner than a bucket of dollars ...
    Appreciate your natural resources and do not sell them for paper and beads, as was recently done by the Papuans and Indians!
  4. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 23 March 2020 14: 33
    -2
    Reminds tales of gasoline.
    Oil prices fell ... GDP: ok, then let's switch to coal!