I recorded a video with Michael Clark from BAMWx.com a few days ago and sent it out to Propane Buzz subscribers.
Clark and I will be putting together a comprehensive Winter of 2018-2019 webinar for all readers of the Propane Buzz, and you can look for that in early October.
We are rapidly approaching the time of year when a good portion of my writing and content will shift to winter weather, weather outlooks, heating degree day expectations and more…these are the bones on which I built this brand and I hope to have many of you along for the ride this winter. You can opt for a monthly subscription through the heart of your busy season and enjoy the benefits that our service can provide…and that service extends into the first quarter of 2019, when much of what I write will be market analysis to help my clients make the best and most informed purchasing and supply management decisions as we all begin to take a very hard look at your 2019-2020 supply needs.
Back to the topic at hand; The Winter of 2018-2019.
Here is a link to the video discussion I recently had with Clark. We get into the weeds in this video, as it’s about 12 minutes long. What follows right now is a written depiction of our discussion.
EUROPEAN MONTHLY MODEL: The Euro monthlies take a computer generated look out into the future, and while the Euro model has been the best long-rage performing model for some time, but basing your winter forecast solely on computer model’s is a fool’s errand.
Here is what the Euro’s 500 millibar Dec-Jan-Feb projection is:
The fingerprints of this projection align with what BAM and others are beginning to see for this coming winter; latitude blocking in Canada and the Arctic, with lower heights in the east and southeast. Clark explains more of this on the video, but the bluer shaded areas would indicate chances for colder weather this winter.
Clark did warn that the modeling, along with their internal data and research (again, explained in the video and which I find very interesting) suggests a warmer start to the winter could be on tap, with above normal temperature anomalies in December. Clark mentioned 2003, 2007, 2012 and 1994 as being analog years that are looking like favorable comparisons, given the overall expected state of our atmosphere this coming December, and comparing it to years where similar atmospheric drivers were in place…here is what those Decembers yielded:
Also, Radiant Solutions (formerly known as MDA) released their preliminary winter forecast back on August 23rd. Here was their month by month look at the upcoming winter:
On the whole, Radiant expects a North American winter, on a Gas Weighted Heating Degree Basis, to be a little colder than last winter, but not much. Here is the Dec-Jan-Feb projection from Joe Bastardi’s team at WeatherBell.com, which he shared publicly two days ago:
The WeatherBell look closely resembles the Euro 500 millibar look.
Lastly, here is a preliminary idea on what BAMWx.com is seeing for the upcoming winter, based on their research of an ascending QBO and low solar activity, both of which factors are present and expected to impact this winter. Moving from Upper Left, to Upper Right, then Lower Left to Lower Right, we are looking at December, January, February and March:
So at this point in time, we could be looking down the barrel of a late arriving winter. It’s been since 2013 that we saw a very cold December, and frankly, December temperatures have not helped our business for some time…and we could be looking at a repeat of that again this year.
For those hoping for early arriving cold in October and November, conditions do not seem favorable for that right now.
If the warmer than normal December temperature anomalies verify (occur) this year, values at the Conway trading hub could face even more downside pressure as inventories seem ample there. Such a result could also put downward pressure at MTB, as well. Still, I would not discount off-hub basis spikes in the Ohio Valley and Northeast if the winter arrives late and is cold in January and February, similar to last year’s timing. But you will recall the Conway and MTB trading hubs dropped precipitously mid-winter of 2017-2018 as well.
This is the exact scenario I have been writing and talking about since late Spring; my fears that we would see a repeat of last year relative to values at the trading hub. That said, I certainly didn’t anticipate seeing a similar price run up this summer as we experienced last year…when you combine the price run up, especially in MTB, with the risks for a hub collapse, that is another uncomfortable scenario.
There are tools available to help protect the purchases you have already made from downside risks. Shoot me an email or give me a call at 515-five-zero-five-8000 and we can have a discussion.
(NOTE: BAMWx.com is the meteorological partner for Propane Buzz. We share their extended two-week forecast on a daily basis, and will continue to do so each and every day this fall and winter. This is a part of what subscribers to The Propane Buzz enjoy each and every day at no additional costs beyond their monthly subscription. Click here to learn more about our subscription offerings).