By: Chris Amstutz
With thousands of years of human technological advances you would think your local weatherperson could prepare everyone for the upcoming winter. Winter is coming (insert your favorite Game of Throne meme here) and unfortunately forecasts more than 7 days out are still iffy from most meteorologists. That is why many would rather trust folklore prediction methods or the Farmer’s Almanac, instead of the Weather Channel. No matter the source of your winter forecast, Americans want to prepare themselves for the upcoming winter (good or bad). For those in the energy industry, we want to get an idea on how much natural gas will be needed for heating demand. A very cold winter (i.e. Polar Vortex in 2014) can have a Bullish impact on natural gas, while mild winters (like the last two) can have a very Bearish impact. The EIA has already put their line in the sand, stating there will be a 10% year-over-year increase in natural gas heating demand this winter. With long term winter prediction methods still as unpredictable as your drunk uncle at Thanksgiving dinner, let’s look at some other weather models (both Old & New) and see what they are forecasting for winter 2017-2018.
The Old Approach
While many in the scientific community scoff at The Farmer’s Almanac, there is still something to be said for a source that bases predictions on observed events in the natural world. Folklore stories that predict harsher winters include: increased abundance of acorns, early geese migrations, heavy fogs in August, and Wooly Bear caterpillars that have blacker fuzz. The almanac’s overall predictions call for a colder, wetter winter for most of the U.S. and regional predictions can be seen below. The almanac boasts an 80% accuracy rate for predicting long term weather, but predictions are often vague, without data, and more opinionated than a Donald Trump talk with your dear Aunt Sally.
The New Way
Back to the Future II predicted us knowing near term weather conditions down to the second by 2015. While this hasn’t come true (like flying cars and hoverboards), forecasting has dramatically improved and scientific modeling can forecast 7-10 days in advance with close accuracy. Winter trends and modeling techniques past this are generally accepted and comparisons to data from previous years are a huge component. The El Nino Southern Oscillation (ENSO) climate indicator is heavily monitored for the U.S. and this year has a 65-75% chance of “La Nina” (yes, it means “the little girl” in Spanish). This normally indicates a higher chance for a colder winter for much of the country but the National Oceanic and Atmospheric Association predicts its’ effects to be mild for this winter (see below). Another technique includes the analysis of pressure systems or “blocking” patterns (great fall football term) that could shelter or expose the U.S. to arctic air. The indications are neutral for this winter but could still change going forward.
Extended weather forecasting has definitely improved over the years. However, with so many changing variables, extended forecasts still have a long way to go before we can count on them. Until accuracy improves, many will still trust nature’s signs over weather models provided by meteorologists. Regardless of your source for future weather, the analysts at Choice Energy Services will continue to provide our clients with weather data from several sources, and recorded in our monthly Bulls & Bears report. We recognize the value in predicting natural gas pricing in the winter and are working hard to keep your company from being left out in the cold (literally and financially).
Confidential: Choice Energy Services Retail, LP.