Energy company Jatoil Ltd (ASX:JAT) has signed a binding letter of intent to acquire four coal exploration permits and permit applications in the Galilee Basin in central Queensland. REUTERS

Coal stocks are getting a boost from a research note by an analyst at Simmons & Co. who wrote that prices for U.S. electricity-generating coal have fallen behind international trends, suggesting great upside for domestic coal producers.

Also, continued demand from the emerging markets as well as a wave of M&A activity in the sector have boosted the industry.

Arch Coal (NYSE: ACI) is up 1.97 percent (as of 1:35 p.m.) reaching a 52-week high.

Other coal issues are doing even better -- International Coal Group Inc. (NYSE:ICO) is surging 7.03 percent, while Patriot Coal Corp. (NYSE: PCX) is up 5.59 percent. Alphs Natural Resources (NYSE: ANR) has risen 4.30 percent and Walter Energy (NYSE: WLT) has climbed 3.06 percent.