No, this is not a review of The Game of Thrones…Winter IS coming. Whether you are in the Dixie or Midwest, it’s coming. Most every weather source I rely on are saying the same things; this winter is shaping up to actually BE a winter.
If you’ve been reading my emails since the summer, that’s been the way I’ve been leaning all along and that has mostly been because of my belief in Solar activity and the lack of sunspots this year, which was to be the waning season of the Solar Maximum…the peak of the 11 year solar cycle which usually has a great deal of sunspots, which equates to milder weather. That did not happen this year and this is the weakest maximum in recorded history. The sun is still the biggest influence on our weather and I just believe we are head for not just a cold winter this year, but a colder period for the next decade or so.
I sent you some data earlier this week which showed the near term forecast…if you missed it, here it is again (click on it to enlarge):
Now, here is an email we just received from one of our sources pertaining to December:
“1989 turned brutally cold for December and then the cold collapsed for much of the rest of the winter… The trend to a more sustained cold this year will come at about the same time as 1989 but I do not think it will be as overwhelmingly cold as in ‘89.. There is certainly the potential for some very significant cold for the central and eastern US moving from late November into December, but maybe not at the intensity of 89. I also think the cold will be able to come back even if fades somewhat in late December and January… The next cold shot next week will be another signal about how solid the cold intrusions may well be this year.”
I wasn’t in the industry in 1989, but my father was. When I started wholesaling propane for Tri-Power Fuels in 1996, the joke in the office was that I was promised up as an ‘indentured servant’ for Tri-Power delivering propane to my father during that brutal period in December 1989. Most all of the ‘war stories’ I heard at that time were ‘December of 1989’ related. It’s definitely one of the ‘holy grail’ months in the modern history of propane supply because supplies were scant and very hard to come by and prices shot up over $1.000 in the Midwest, which was a big deal back then as the product had recently ceased being federally regulated. Prior to 1989, the EIA’s were not a ‘thing’; it was just the API’s. The EIA’s were two months in arrears, so in early December they showed big draws for October and then the weather hit and the markets went nuts.
As for the weather in 1989, here is a synopsis of what we experienced throughout most of the nation. A December that is anywhere near the December of 1989, with inventory levels the way they are, is going to create problems in every region:
Midwest: Inventory levels are at low levels and a hectic December could send prices skyrocketing
TEPPCO: The pipeline is a mess right now and has been on allocation for weeks and probably will all winter long with the loss of the Todhunter cavern. Belvieu +$.60 is already being sold in the Northeast
DIXIE: We’ve already experienced wet barrel spikes and if you add demand into the scenario, things could get even uglier
DO NOT BE CAUGHT OFF GUARD; it would be wise to be working off the top side of your tanks. If you are still short product for December, I think it would be a good idea to lock in some of your needs as the weather/demand data is supportive of stronger prices.