Warmer weather and higher natural gas prices helped to increase utility coal burn in May, the US Energy Information Administration said Tuesday.
In its latest monthly Short-Term Energy Outlook, the EIA estimated coal consumption increased by 24.4% or 9.6 million st month on month to 48.9 million st.
EIA said coal accounted for 27.6% of May generation, compared with 32% from gas-fired facilities. In April, coal accounted for 25% of generation and gas 31.5%.
In May, the average spot Henry Hub natural gas price was $3.15/MMBtu, up 5 cents compared with April. Prices are expected to stay near $3.20/MMBtu through October before climbing at the end of the year to $3.43/MMBtu.
Despite the additional coal burn, the EIA estimates utility stockpiles grew slightly in May, with inventories up less than 1% to 164.1 million st.
The agency predicts warmer weather should increase June coal burn to 59.5 million st and diminish stockpiles to 158.5 million st at month's end.
Coal consumption should increase to 71.4 million st in July and peak at 72.5 million st in August when summer cooling demand is in full force.
Coal inventories are expected to reach a 2017 low of 141.9 million st at the end of September and begin 2018 at 145.2 million st, down 25.7% or 50.3 million st year on year.
