All data is delayed
See More

Coal set to overtake oil as top fuel

Dec 18 2012 15:51
London - Oil prices rose on Tuesday as hopes grew of a US deal to avert a "fiscal cliff" of tax hikes and spending cuts in the United States, the world's biggest consumer of crude, analysts said.

New York's main contract, light sweet crude for delivery in January, increased by 49 cents to $87.69 a barrel.

Brent North Sea crude for February advanced 58 cents to $108.22 per barrel in London midday deals.

"Crude oil prices rebounded on Tuesday amid hopes about the US budget details after the meeting between US President (Barack) Obama and House Speaker John Boehner provided some optimistic signs about the US economy, showing potential for a rebound in the US oil demand," said Sucden brokers analyst Myrto Sokou.

Obama hosted top Republican lawmaker John Boehner in the White House for 45 minutes on Monday in the latest effort to keep the US economy from going over the fiscal cliff.

The meeting follows news that Boehner had changed his position on not allowing any more taxes, saying at the weekend that he would agree to some hikes for people earning more than $1m.

Originally Obama insisted higher taxes kick in for households earning more than $250 000, but has since offered to increase the threshold to $400 000.

Analysts say the development shows the outline of a tentative deal is being formed.

Elsewhere on Tuesday, a report said coal was set to surpass oil as the world's top fuel within a decade, driven by growth in emerging market giants China and India, with even Europe finding it hard to cut use despite pollution concerns.

"Thanks to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in global energy demand during the first decade of the 21st century," said Maria van der Hoeven, head of the International Energy Agency.

Economic growth is expected to push up further coal's share of the global energy mix, "and if no changes are made to current policies, coal will catch oil within a decade", she said in a statement.

The latest IEA projections see coal consumption nearly matching oil consumption in four years time, rising to 4.32 billion tonnes of oil equivalent in 2017 against 4.4 billion tonnes for oil.

That has consequences for climate change as coal produces far more carbon emissions responsible for global warming than other fuels.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

barack obama  |  fiscal cliff  |  coal  |  oil


Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Marketing is a big concern in SA's small business community, followed by a lack of confidence and partnering with the wrong people, according to a survey.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The 25 basis points interest rate increase is:

Previous results · Suggest a vote