Good morning. The propane industry, along with many others, waits and watches to see the fallout from President Trump’s decisions to slap tariffs on Canada, Mexico, and China, with threats of tariffs on Europe. Part of the tariff regime is a 10% tariff on Canadian oil, which would impact propane prices in areas of the country that rely on Canadian Propane Imports. This would be the country’s northern tier, but it could have farther-reaching impacts, especially as the industry is kicking off bid season.
It seems that the United States and Mexico are talking; this is from the New York Times: “President Claudia Sheinbaum said her country struck a deal to put the tariffs on hold for a month, but levies on Canada and China were still set to take effect on Tuesday. U.S. shares fell at the opening bell, following drops in Asian and European markets, amid fears of a trade war.”
Market analysts believe it will be much easier for the US and Mexico to stave off a tariff fight than for the US and Canada. But at this point, who knows what will happen?
Now, let’s talk about the weather.
If you go to the 7:20 mark of the linked video today, you will see a split of the Polar Vortex. Part of it is on our side of the planet; part of it is on the other. As Michael Clark said in his video today, if you looked back at model data from the outbreak of 2014, it would look just like this. So the back half of February has a chance to be colder than normal for much of the United States, with a widespread blanket of snow laid down over the northern two-thirds of the country, say the Mason-Dixon line north.
We will have a milder period this week before the advertised split. If the split doesn’t happen, warm risks are on the table. However, the model data is fairly confident that we will see the Polar Vortex split. This split type has historically meant colder-than-normal conditions for March (image below) and even into April. BAM’s new March forecast can be seen below, and that is one of the colder March looks we have seen in years.
Revisiting the back half of February (image below), the northern tier states will experience bone-chilling temps if the PV split happens, with single to double-digit temperatures below normal farther south.
One thing to point out is that ‘normal’ depends on the time of year. The coldest heart of winter for much of the United States is the last two weeks of January. From that point, ‘normals’ begin to rise. That’s not to say that the back half of Feb won’t feel really cold in some areas, but when you see five to ten degrees below normal for say, Kansas City, here is what normal looks like for the given dates:
January 20th: High 38, Low 19
February 20th: High 45, Low 25
You also see the sunset at 5:26P on January 20th in Kansas City and 6:02P on February 20th, so nearly 30 more minutes of energy from the sun.
So if you have temps at ten degrees below normal for February 20th, you are still looking at highs above freezing, compared to ten degrees below normal on January 20th, which would see daytime highs below zero.
The current forecast from BAM for the back half of February and March is a welcomed sight to propane retailers, and this winter is shaping up as one of the best in more than a decade for most of you.
