Levin said in his note, “Markets are a forward-looking mechanism, and what they are saying right now about coal in 2017 is bullish.” He said bankruptcies of major coal companies have reduced the over-supply built up during a mild winter, and a hot summer would lead to higher demand. Also in coal's favor is a 60 percent rise in natural-gas futures since March, Loh reports: "That has made coal mined in the Powder River Basin of Wyoming and Montana and, to a lesser extent, in the Illinois Basin, more cost-competitive, said Andrew Cosgrove, an analyst at Bloomberg Intelligence."
Still, "Coal bulls face daunting challenges," Loh writes, quoting Cosgrove: “The sentiment back in January was about as low as it could possibly get. Some people invest off that premise and you never know. Coal’s been beaten up for the better part of six years. Any green shoots whatsoever, people may choose to hang their hat on that.”