There is a warm trend coming for pretty much the entire United States. Some much needed relief to the Midwest, who has been locked in the grips of a brutally cold winter with no respite.
Between now and the end of the month, we’re looking at warming and significantly above normal temps. Now, folks will still be turning on the furnace at night but it won’t be a matter of survival in some spots as it has been for most of December, Jan and the first half of Feb.
The end of the 15 day outlook shows a familiar friend, the Pacific Ridge, returning to the pattern…this has dominated our weather this winter and will shoot another round of below normal temps into the eastern two-thirds of the country…it’s to early to know how long lived that will be, but winter isn’t over yet and we’ll see solid demand through March and into April, in my opinion.
A wildcard in all of this will be inventories in Conway…as we’re perilously close to ‘running out’ of propane there…that could have an enormous impact on pricing.
We’ve seen prices begin to drop in the Midwest and Southeast this week, and pricing for next fall looks very good (in the $1.20’s at Midwest terminals for gas pulled between September and December) as I expect we’ll see many of the same inventory and logistical challenges in place.
Some are asking ‘how low will it go’?
Consider this…Crude Oil is back to $100/bbl. The historic 60% ratio of propane to crude puts propane at $1.4300/gallon. At $90 crude we’re talking $1.2900/gal propane…at $80 crude it’s more like $1.1500/gal propane.
Conway pricing for Sept-Dec 2014 is at $1.1700 as of this email. That equates to crude being about $82/bbl using the traditional 60% value….crude is over $100/bbl right now and rising…given this factor and my belief that inventories are not going to rebound this winter and we’ll head into next winter with huge challenges and volatility, I think now is the time to start buying for the 2014-2015 winter season or for those of you who have been buying, keep layering in purchases.
Call or email me for current quotes.
PS: I thought I’d repost this link today from an email I sent out back in August…remember our friends at the Farmer’s Almanac? Click on this link to go back and read that item and prepare to be amazed…but be reminded that the Almanac relies on solar activity or lack thereof (sunspots) to base their predictions…as do I.