The Weather Outside
Oh, the weather outside is delightful, so no fire inside, that's frightful. And since gas prices are low,
Let us go! There’s no Snow! There’s no Snow! It doesn't show signs of stopping, as temperatures keep popping. The heat is turned way down low, there’s no snow, there’s no snow, there’s no snow.
Warm temps and an oil glut has put a lot of pressure on oil. Yet could there be a change in the weather? While December will see at least one more heat wave across the east coast, the temperature in January may bring us a winter wonderland just yet.
AccuWeather Chief Long-Range Meteorologist Paul Pastelok expects a partial change in the weather pattern to begin shortly after the start of the new year. While locked-in cold may still be weeks away, there are signs of more significant and more frequent visits from cold air east of the Rockies in January according to Accu-Weather. "We are not looking at a complete change in the pattern, but rather an easing of the bouts of record-breaking temperatures," Pastelok said. Pastelok added, "an anticipated change in the storm track over the northern Pacific that would translate to periodic southward dips in the jet stream in the central and eastern part of the nation during January. The jet stream is a high-speed river of air high in the atmosphere, which guides weather systems along and tends to separate cold air to its north and warm air to its south. The end result is likely to bring more of a balance between days with below-average temperatures and above-average temperatures. While the milder days could still outnumber the cold days, there would be very few or no days with record highs as reported by MSN.
These longer term forecasts is one reason natural gas rallied yesterday. It seems with production falling, any change in the weather will change the very bearish market psychology.
Oil is also getting supported by the possibility that China is going to add more stimulus to their economy. After its top economic meeting, the Chinese government is promising a more flexible monetary policy to support reforms and help for rural residents trying to buy homes. As I have said before, China’s oil demand is still strong and with more stimulus it will be stronger. The Wall Street Journal reports, ”Refineries in China, meanwhile, have been a key driver of global crude oil demand topping 1.8 million barrels a day in 2015 and this is reflected in rising exports of refined products, or distillates, to other countries in Asia. According to Chinese Customs data, net distillate exports were 0.54 million barrels a day in November. About 93,000 barrels a day of that was fuel oil, only the third time on record that the product has been exported."