As reported in Wall Street Journal

By
Tim Puko

A repeat of last year’s snowy, Arctic-cold winter is looking a little more likely today. Natural gas traders, still scarred by the memory, are bunkering in.

Buyers have been rushing into the gas market for a week on fears of a sequel to last winter’s Polar Vortex, which walloped the eastern half of the U.S. with brutally cold temperatures from the deep south up to New England. Many spent months dismissing that possibility as simple panic, but now meteorologists are getting more pessimistic.

Both Commodity Weather Group and WeatherBELL Analytics LLC released long-term forecasts this week showing a notably higher risk for a cold December. That was supposed to be relatively mild month this winter, balancing out a cold January and February. Now the whole winter is shaping up to be “pretty nasty,” WeatherBELL said.

That has propelled natural gas to a six-session rally. It’s rebounded nearly 18% since it hit its 2014 low last week. Gains of nearly 3% Tuesday are pushing it near a three-month high.

And traders are all wondering if the winter of 2015 will bring a repeat of 2014.

“I think it’s a reasonable risk,” said Matt Rogers president and meteorologist at Commodity Weather Group in Bethesda, Md. An early season burst of cold starting next week is already “really spooking a lot of people.”

More than half of all U.S. homes use natural gas as their heating fuel, making the natural gas market especially vulnerable to weather. Tepid demand had capped the market for four months and had bankers and investors fearing a glut by the spring. The new forecasts have flipped that script, at least temporarily.

Timothy J. Collins, director at Fairfield Advisors LLC in Madison, N.J., has had to get out of spread bets that depended on falling prices in January, he said. He is now trying to buy into positions that would benefit from rising prices that month, but he still thinks that record production will help balance out the fear of a Polar Vortex repeat, he said.

“I think people are overly sensitive to it,” said Mr. Collins, whose fund manages $35 million. “You know how they say the military is always trying to fight the last war? Well, we keep trading the last position.”

The rally could produce bargains for stock investors, said Jonathan Waghorn, co-portfolio manager at Guinness Atkinson Asset Management Inc. in London. Its $84-million fund holds Chesapeake Energy Corp., QEP Resources Inc. and Ultra Petroleum Corp, among other oil and gas producers that could benefit from rising gas prices balancing out free-falling oil prices.

“Gas is strong, yet the energy equities names are all getting hit,” Mr. Waghorn said. “If you believe the gas story, today’s giving you a good opportunity to pick up some energy names getting smashed by weak oil.”

Enough Already

February 17, 2014

Well….

 

 

We did it

 

 

Last week we hit

 

The record books

 

 

 

This has been the 3rd most snow

 

The Philadelphia region has received

 

Since they started keeping records

 

Back in 1884

 

 

That’s 130 years ago

 

 

 

We are now over 55 inches

 

And should break the 60 inch mark

 

This week

 

 

 

Reactions have been mixed

 

 

The kids love it..

 

 

Another day off from school

 

 

Parents..

 

 

This means juggling

 

Their schedule

 

To take care of the kids….

 

 

Who are now home from school

 

 

 

Comments run the gamut…

 

 

 

I don’t need any more practice

 

Shoveling snow

 

 

 

Enough already

 

 

 

Where’s all the people yapping about….

 

Global Warming

 

 

 

Damn groundhog

 

 

 

Doesn’t anyone know how to drive in this stuff

 

 

 

I surrender

 

 

 

At least the Phillies started spring training

 

 

 

 

That takes us to a brighter note

 

 

 

You know spring

 

Is around the corner

 

When the Phillies

 

 

Start spring training

 

 

 

I can feel my bones starting to thaw already

 

 

 

Batter Up!!!!!!

1…2…Punch

January 29, 2014

The polar vortex punch

 

Keeps punching

 

 

This week we saw

 

Temperatures plunge….

 

Once again

 

 

It may have been nice….

 

The first time around

 

 

 

But by now…

 

 

People seem to be getting

 

A little groggy

 

 

It’s time to change the channel

 

 

 

As I stated last week

 

The energy market did react

 

To the plunging temperatures

 

 

Basis (transportation cost) went up 1000% in 1 day

 

 

Over the past year

 

 

Basis pricing

 

Has been at a 10 year low

 

 

The jump in pricing

 

Had many experts just shaking their heads

 

 

They were finding themselves in…

 

 

Unchartered waters

 

 

This was beyond whiplash

 

 

 

We do not see these prices sustaining

 

 

If you look at natural gas futures

 

A couple months out

 

Prices tend to be

 

More reasonable

 

 

 

You just do not want to

 

Be shopping your account

 

And include the present month energy pricing

 

In the mix

 

 

For it will skew the whole proposal

 

And you will end up paying a premium

 

 

 

They say…

 

Patience is a virtue

 

 

In this business

 

You need it

Polar Vortex

January 29, 2014

Let’s take a look

 

At our extended weather forecast…

 

 

Well…

 

 

Tomorrow is going to be cold

 

 

 

The next day…

 

Should be just as cold

 

 

Possibly colder

 

 

 

Then

 

The day after that…

 

 

Will probably be just as cold

 

 

 

However, we also show that

 

There could be a chance of….

 

 

Freezing rain…

 

 

It might be snow…

 

 

Or

 

 

Possibly a Wintery Mix

 

 

 

This can all bring icy conditions

 

 

 

 

Let’s be careful out there

 

 

 

 

 

Let’s take a minute to look at

 

 

What may be causing

 

 

This weather pattern

 

 

 

Normally

 

We would be looking to the

 

 

Western Pacific

 

 

 

However it seems that La Nina

 

 

Is taking the winter off

 

 

 

Instead…

 

 

We have been visited by

 

 

A polar vortex

 

Pushing down from the Artic

 

 

 

In the first two weeks of 2014

 

 

Much of the United States weathered

 

A cold snap of unprecedented proportions…

 

 

 

A weather phenomenon known as…

 

The “Polar Vortex”

 

 

Shattering temperature records across the country

 

 

 

Just when you thought it was safe

 

To go outside…

 

 

 

Another polar vortex is on the way

 

 

This one is due to hit

 

 

This week

 

 

 

 

Is this a new phenomenon?

 

 

 

I thought it was just cold outside

 

 

 

Because it is…

 

 

January

Meanwhile…

 

The energy markets

 

Have been in a reaction mode

 

 

 

Put a name on the weather conditions

 

 

And they are all in

 

 

 

Prices jump

 

 

 

You wait a day…

 

 

They jump again

 

 

 

You wait a few more days

 

 

Prices start to ease back down

 

 

 

 

Prices never come down…

 

 

As fast as they go up

 

 

 

With another polar vortex

 

 

On the way

 

 

 

You can almost hear

 

 

The energy market’s teeth clattering

 

 

 

While all this is happening

 

 

 

We find it best

 

To look past

 

The frenzy

 

 

One thing I have learned

 

 

Being in the energy business…

 

For 13 years

 

 

 

Patience is a virtue

 

 

 

Our goal has always been

 

 

 

To educate our clients

 

 

And…

 

 

Provide the best opportunity

 

 

For savings

 

 

 

 

With a lower basis (transportation) cost

 

 

And increasing natural gas supplies

 

 

 

Most experts feel

 

 

Natural gas prices will settle down

 

 

 

Once again bringing

 

 

Great opportunities for savings

 

 

In both

 

 

The Natural Gas and Electric markets

 

 

 

We just have to wait for the Polar Vortex

 

 

To pass