Good day to you…I am glad to be back in from the road after a week of travels, but Georgia was beautiful and it’s always great to put faces with names in this industry. Now…on to the show.
WHERE’S THE SUN? This solar cycle is one of the weakest solar maximum periods in a century…which follows up a very deep solar minimum cycle. I am going to share a snippet from an blog I follow. I will warn you it’s not necessarily mainstream but I have been a big believer in sunspot activity and cycles for a long time. The Farmer’s Almanac, while hardly worth their in week winter forecasts so far out, use sunspot activity for their long term forecasts that have been remarkably accurate through the years, as long as you focus on the macro and not the micro. They nailed it last year, and you can read my blog post from last August to be reminded of just how right they were. Here is what I want to share:
“Finally, if history is a guide, it is safe to say that weak solar activity for a prolonged period of time can have a negative impact on global temperatures in the troposphere which is the bottom-most layer of Earth’s atmosphere – and where we all live. There have been two notable historical periods with decades-long episodes of low solar activity. The first period is known as the “Maunder Minimum”, named after the solar astronomer Edward Maunder, and it lasted from around 1645 to 1715. The second one is referred to as the “Dalton Minimum”, named for the English meteorologist John Dalton, and it lasted from about 1790 to 1830. Both of these historical periods coincided with below-normal global temperatures in an era now referred to by many as the “Little Ice Age”. In addition, research studies in just the past couple of decades have found a complicated relationship between solar activity, cosmic rays, and clouds on Earth. This research suggests that in times of low solar activity where solar winds are typically weak; more cosmic rays reach the Earth’s atmosphere which, in turn, has been found to lead to an increase in certain types of clouds that can act to cool the Earth.”
I don’t want to play Chicken Little here, but I have been in the ‘Grand Minimum’ camp for a bit now…from Wikipedia: “Grand solar minima occur when several solar cycles exhibit lesser than average activity for decades or centuries. Solar cycles still occur during these grand solar minimum periods but are at a lower intensity than usual. Grand solar minima have shown some correlation with global and regional climate changes.”
It’s worth watching…then again this is a decadal change so as long as we’re all alive and breathing oxygen, we’ll have little choice but to watch.
As for the winter, El Nino is still en vogue. However if he arrives later, say December, we still might be susceptible to Pacific Ridging as we were one year ago…more on that in a second.
COOL TEMPS CONTINUING? Much of the nation experienced a cold shot last week…it didn’t make it to where I was in Georgia but back home in Tulsa we saw record low high temps…so far in Kansas City, through the first 19 days of the month, this is the coldest January in their nearly 130 years of weather history. This item is calling for cooler than normal temps out into August. If that holds up in the Midwest, the corn harvest will continue on its record track and won’t distress too badly during what can be an unforgiving month. Things are still looking good for corn drying throughout much of the nation, with Southern Illinois being a bit of a dry spot.
This summer’s mild weather in the heartland appears similar in that it’s yet another trough of cold air from Canada making its way down into the Midwest. You’ll recall this past winter when the Polar jet took a huge northward run before hitting a low and plunging southward into center to eastern two-thirds of the nation. This is where the ‘Polar Vortex’ air masses came from. Really, it was the polar jet stream and a cut off low…the term Polar Vortex must have sounded sexier to the meteorologists to use. There’s nothing new under the sun, however. The term ‘A Cut off low is a weatherman’s woe’ has been around a long time…and some of my radio and tv instructors were using it when I was in college in 1990.
Without the El Nino influence, which is a more flat west to east type of pattern as opposed to the undulating ridging, we could ridging stay in play into late Fall and early Winter…or if El Nino doesn’t hit until 1Q2015, we could see another big year in propane consumption.
These places are no fun to be in. Last year, the tea leaves were easier to read and I think NGL did as good as anyone in letting you know what our thoughts were. But when you can legitimately make a case for prices moving up and for prices to move down, that’s flying where eagles dare. I think the smart play is to be covered on what you have sold but don’t get too long if you don’t have to, unless we see something fundamentally strong enough to lead us that way.
But let me finish this weather piece with this thought…I am now more concerned with this winter from a supply side than I have been at any point in time, related to the Midwest. I am not yet to that point for the Southeast. I think we’ll see a record corn harvest
BLAST FROM THE PAST: I was going through some of last year’s emails that I had sent out to clients and I came across one that showed just how wicked and cruel August was last year…here is the link to the entire post but this was the meat of it:
Prices as of 7/31/13
Prices rose nearly every day during the month of August and what is amazing to me is it wasn’t a quarter cent here or there, but rather the markets averaged an increase of over ONE CENT PER DAY for the 22 trading day in August! Here’s what I could have sold gas for end of day on August 30th (sans the pipeline tariffs)
That’s a .2425 cent increase in Conway, which is $.0110 cents per day. There was a $.2475 increase in Hattiesburg and Mt Belvieu (TET). We’re looking at an overall increase in prices of around 25 percent in just one month.
Let’s hope history doesn’t repeat itself this winter. Right now, we don’t see the petchems or exporting levels anywhere near where they were a year ago, but geopolitical unrest is much greater than it was a year ago.
Ahh the murky middle…I don’t like it either.