After the drop in oil prices in oil last month, coal was treated as the most expensive fossil fuel. The travel barriers applied due to the coronavirus caused the difference between coal and oil to widen.
Coal was one of the cheapest fossil fuels ever, due to its lack of clean energy and relatively more extraction. The global drop in oil prices last month caused coal to become the most expensive fossil fuel.
According to London-based energy exchange ICE Futures Europe, the ton price of Australia’s Newcastle coal reached $ 66.85 on Friday. When this price is compared with oil, it is seen that the price of coal is well above the barrel price of oil, which is 27,36 dollars.
Coal consumption in the USA and Europe declines with the increasing demand for natural gas and renewable energy sources, while coal consumption continues to increase, especially in emerging markets such as Asia. Coal causes approximately two times more carbon dioxide emissions than the dirtiest fossil fuel and gasoline.
Newcastle, Australia’s coal export hub, mostly represents coal for energy use, with different supply and demand principles than the oil market. Flight cancellations and travel restrictions due to coronavirus reduced global oil use by up to 20%, causing coal to settle on top. Newcastle coal is being traded on an equivalent basis to the Japanese-Korean energy market, the benchmark for liquefied natural gas in Asia.