There are some power plants that can (or at least could, not sure if your allowed environmentally anymore) switch from gas to oil, but plants can't switch from coal to gas. Instead what happens is that coal plants get switched off and gas plants run instead. Historically that hasn't been the case, coal was baseload power and gas was only used when demand peaked. This is what they called Economic Dispatch and is best illustrated by the 'supply stack'. Below is a 'supply stack' for PJM (Pennslyvana Jersey & Maryland) copied from a Penn State paper. This is obviously old as it still shows coal as being 'lower' (aka cheaper) in the stack than Gas. But @ron99 is correct, gas units are already running and coal in many cases is now on the margin and only run when demand increases enough to justify it.*
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*It's actually not that simple as it's expensive to cycle (aka stop and restart) a coal plant while its a lot cheaper to cycle gas plants. Hence economics can actually dictate that the less efficient coal plants drop to minimum load at periods of low demand (ie 3am) to aviod the horrendous restart costs.
Getting back to the Natural Gas discussion... EIA reported a 1BCF withdrawal from storage today for last week. This is the third week in a row this sets a record for the lowest withdrawal for this week of the year. Gas Storage levels are now at the highest they have ever been as we switch from withdrawing to injecting. Unless we have a really warm summer (which is actually quiet possible given that February was the warmest Feb on record) one has to wonder where all the gas is going to go in the next 7 months.
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It looks like planting season will begin without serious problems. COT data suggest a move upwards, whereas farmers become sellers at higher prices. This suggest a move sidewards into spring, when weather can become critical.
I intend to sell puts at lower prices.
Sold a small lot of the SJ C9. This is a short time trade, the option will expire next Thursday. There is a large open interest for SJ C9 and SJ P8.8. Very often options with a large oi compared to others expire worthless. Unfortunately the SJ P8.8 did not get to a price level that makes it interesting to sell. I prefer holding strangles in this situation.
LHJ P64, P68, C74 (Strangle together with the LHQ call)
LCJ C140, C142 (Hedge for the longer term puts)
SIN P12, C21 (Strangle)
Currently my portfolio is slightly bearish commodities. Strangles in LH, LC, SI, KC hedged against CT. Grains and beans are not hedged. The portfolio will be close to neutral after the expiry of the LCJ calls on April, 1st and the expiry of the SJ calls the day after tomorrow (if I am not stopped out earlier ...).