Goldman Sachs Says Natural Gas Rally ‘Unsustainable’
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Investors should sell October natural gas futures on the New York Mercantile Exchange because a 12 percent rally in prices over the past three weeks is “unsustainable,” according to Goldman Sachs Group.
The fuel’s discount to coal has narrowed 35 percent compared with March and a smaller amount of substitution of coal with natural gas may take place at current prices, Goldman’s London-based analysts, Samantha Dart and Johan Spetz, said in a report e-mailed today. Producers switch between gas-fired generators and coal units depending on fuel costs.