It's a good day to be invested in S&P/ASX 200 Index (ASX: XJO) coal shares, as those involved in the commodity defy the broader market's downturn.
The share prices of Whitehaven Coal Ltd (ASX: WHC) and New Hope Corporation Limited (ASX: NHC) are both outperforming. Take a look:
- The Whitehaven share price is currently up 2.36%, trading at $6.94
- That of New Hope is up 3.61%, with the stock swapping hands for $4.735 apiece
That leaves the companies among the best performers on the S&P/ASX 200 Energy Index (ASX: XEJ). The sector is currently up 1.76%, making it the market's best-performing sector.
Meanwhile, the broader ASX 200 is sliding 0.33% right now, breaking a three-session winning streak.
So, what might be driving ASX 200 coal shares higher on Thursday? Let's take a look.
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ASX 200 coal shares lift amid fears of energy shortage
ASX 200 coal shares are lifting amid reports European coal futures surged overnight on concerns an energy shortage could soon become a reality on the continent. One major cause appears to be drought.
French utility provider EDF has reduced its nuclear power plants' capacity utilisation rates because it doesn't have enough water to cool reactors, Oilprice.com reports.
Meanwhile, water levels on the Rhine have fallen to critical levels. That's impacting the transport of energy commodities along the shipping corridor, reportedly leaving Germany in a particularly precarious position.
To top it off, Germany is still struggling to fill a gap in the supply of gas it used to receive from Russia.
Germany's top regulator has warned the nation must cut its gas usage by 20% or risk a shortage this winter, according to reporting by the Financial Times, cited by Business Insider.
It reportedly cautioned that, even if all the nation's gas tanks were full, it would only have enough gas to get it through around two and a half months.
The tension has sent both gas and coal prices higher, as some European forward curve contracts hit all-time highs overnight, Reuters reports.
However, Yancoal Australia Ltd (ASX: YAL) – which isn't included in the ASX 200 – hasn't joined in on coal shares' strong performance today. The stock is currently down 1.74% at $5.375 on the back of the company's full-year earnings.
