The weather is the big story, and will be, but first, the markets…
Propane values are much stronger this morning, due to weather demand but also a surge in crude values in morning trading. WTI closed at $73.92 yesterday but is trading just south of $78/bbl as I write this at 10:30A central time.
The hub values are moving higher, but we are seeing some significant basis/differential increases east of the Missouri River, or much of the eastern half of the United States.
Logistics are holding up for now, but when you look at the weather forecast for the next four to six weeks…whoo boy, many of us are in for wall-to-wall action. Speaking of the weather….
Let’s move forward in time chronologically and break down the forecasted weather pattern.
First, here are the next eight days. You can see a bit of moderation from the 16th through the 19th:
The slide below shows the periods of January 20-29 and January 30 through Feb 7. When you consider the amount of cold many folks have already experienced, on top of these looks, we are talking about a rather epic January, on par with January 2014, one of the most memorable months in the history of propane retail.
Lastly, the slide on the left shows the weeks three and four forecast, then the slide on the right shows BAM’s updated February forecast. The core of the January cold thus far has been more central and east-focused. Folks out west will have their party in February and even the last week of January.
If the forecast data we have shared today comes to fruition, January through February of 2025 will be talked about in the same awe-inspiring tones as the Winter of 2013-2014. Due to the mild December, the overall Dec-Feb GWHDDs might not stack up to Dec-Jan 2014, but Jan-Feb just might.
That is, IF the forecast verifies.
