We’re calling propane up nearly $.0175 to start the day. People are asking ‘Why?’ This is demand and weather driven. The forecast for the next 10 days is cold, cold, cold! Current pricing is below but you’ll definitely need to call in to confirm.
I am incredibly bullish right now. I have been bullish on December for the past few weeks, but now I am taking that into January, based on what we are seeing and the Southern Hills Pipeline pump that begins in January, where 50,000bbls/day leaves the Conway market to Belvieu. Those are not ‘maybe they will ship them’ numbers; those are contractually committed volumes that WILL BE SHIPPED. I just confirmed that with one of our traders and that’s the deal. This winter is beginning ominously, with deep cold pushes typically reserved for January and February.
I believe we’ll see $1.50/Conway numbers at some point this winter…if not much higher.
Many of you are in a good position on what you have bought, but if you are short I don’t think you will be hurt owning gas at current prices if you lift it over the next 30-45 days.
Also, some of you have asked about this; we do allow our customers to sell back contracts they have purchased. We also allow folks to take long positions, meaning you are buying more gas than you can pull, with the understanding that you either have to lift those gallons or sell them back. One of our clients purchased 1 million gallons last week for this purpose, and does so every year.
If you are curious about that, give me a call.