The messages are mixed in InvestorLand, but if you listen to Asia, there may be hope yet for the coal markets.

All sorts of new research reports are out in the last few weeks. They disagree on the future for thermal coal, the regular stuff they send down a chute into the local power plants.

This may be the first year for power plants to have inventory increases over the summer since 1984. In English? That roughly means that nobody used an air-conditioner this past summer. Plenty of extra coal didn't get burned.

Most observers keep the price of steam coal from northern and central Appalachia in the mid $50s for next year's forecast. If the current big producers here can't establish some more production discipline, the price could drop further.

The better news? All the reports from the major broker-dealers and boutique adviser Stifel Nicholas all peg the spot price of metallurgical coal as headed back to the area of $180 to $200 per ton for 2010 and beyond.

Met is what we use to make steel, and it peaked at a spot price in excess of $325 off the boat per ton last year, when the energy sector topped at the end of June 2008.

Asian demand for making steel for building and cars is still rising, as those countries try to prop up their economies by spending on actual infrastructure.

What does that mean in West Virginia?

As usually is the case lately, those who are most leveraged to met coal are those who have the highest ceiling here. Of the largest producers, Massey Energy is probably best set to move its product mix to ship more met next year.

NG Situation Tightens

On the one hand, the price of the natural gas contract for the current month has doubled in less than a month. On the other, well shut-ins are a real thing as pipelines conduct something called "operational flow orders" on many systems, forcing producers to put no more gas into the pipeline system than is currently being used.

Elsewhere, wells are intentionally drilled and not completed. There is nowhere for gas to go. And to our north in Pennsylvania, companies like Chesapeake keep buying or leasing rights to drill in the Marcellus shale. The most recent big public buys occurred in Wyoming and Susquehanna counties there, with publicly reported numbers in the area of $5,750 per acre plus a 20 percent royalty for five years.

No signs of stopping, as reported here the past few weeks.

What's the denouement? Barring a violently cold winter that starts next week, I still think we get a quick bath back down below $3 per MCF at some point, and some cheap buys in the patch for guys who have the cash to take advantage of their overleveraged brothers.

We're still at record storage nationally, or close, at more than 3.5 trillion cubic feet of gas.

Moody's Can't Get It Right

We talked last week about possible suits by the West Virginia Investment Management Board against various bond raters and brokers. It even appears that we may get the grandstanders from our state's Attorney's General Office involved. It's pretty much what all the cool AGs are doing, suing the various bad actors of the banking crisis, with odds of remuneration often between slim and none.

Worst of those guys was probably bond-grader Moody's (MCO), which we pilloried in this space. I advocated our state's investment officers short that company and make money on its probably demise. Since my column was written last week, their stock is down 14 percent.

Rob Cornelius of Parkersburg writes a column for The State Journal. His e-mail address is robcwv@gmail.com.