WEATHER: Things are still looking good for January and February and along the lines of what I have been sharing since the fall.
This is from WeatherBELL.com for Christmas
Here are some of the reasons for confidence for the colder Jan/Feb:
-Warm Sea Surface Temps in Pacific Northwest & off the coast of California and the Baja
-El Nino event clearly pointing to its ‘Modoki’ history
Here is a graphic from WeatherBELL.com which shows a combination of winters when the current conditions were observed and what was produced those winters:
For those of you with contract (which is the vast majority), keep pulling loads and get it out as soon as possibe. I just cannot see prices spiking anywhere near $1.20 or higher at the terminals this winter, even if we do have some demand spikes in January and February. The sooner you get the higher priced stuff pulled (which your competitors likely have as well), the sooner you can start pulling off the rack and take advantage of strong retail pricing. But the good news is that winter still looks like it will hold up its end of the bargain for us, so this year should still be a good one.
INVENTORIES: The EIA’s reported just a 200K/bbl build. Flat in Conway and +300K in the gulf. I will have another post later today that will focus on crude oil and where it may be heading..there are a lot of opinions out there on that topic. I read about 10 items last night late before going to bed and it was fascinating to see so many different views, but there were enough common threads that I was able to parse out that I feel worth sharing with you.