Can The Weatherman Ever Get It Right?

Is the weatherman always “wrong”? Just last week weather forecasts were calling for an end of the winter storms and a warmer March than had earlier been

forecast. The old saying “March roars in like a Lion and out like a Lamb” maybe very true this year. Last week Natural gas traded as low as $4.54 as the weather called for the end of the “polar vortex”. Natural gas had topped out of $6.40 as the US witnessed the fiercest winter in decades. January was the coldest month on record. Federal Reserve Chief Janet Yellen’s testimony before the Senate Banking Committee was delayed for two weeks due to the harsh weather conditions. For weeks lackluster US economic data was blamed on the freezing temperatures. Declines in jobs and retail sales, manufacturing and trade were all blamed on the record cold. And most speculators went along with this idea. The US economy was booming along nicely until the freezing storms hit in January. It only made sense, who shops or buys a new car or home in a major storm. On Saturday, once again the weatherman was proved wrong. The US is now being covered by one of the worse storms this winter. Natural gas has climbed 35 points since the opening to trade at 4.7035. A fierce winter storm could dump up to a foot of snow along a 1,500-mile swath of the U.S. heartland before slamming into the East Coast late Sunday, weather forecasters warn. Air and ground travel are expected to be affected—along with as many as 100 million Americans — by this latest wintry blast, which was making its way across the Midwest on Saturday. One batch of snow will push slowly eastward on Saturday into Sunday from the Great Lakes to part of the central Appalachians, AccuWeather said. It is during this first batch where Chicago, Detroit and Buffalo, N.Y., are likely to get most of the snow, according to forecasters. The last part of the storm is likely to produce the heaviest and longest-lasting snow farther south in the Ohio Valley, Northeast and mid-Atlantic, AccuWeather said. Go figure… Can the weatherman ever get it right?

The new storm should also support crude oil prices which have climbing on unseasonably high prices well above the 100 level on increased residential demand for heating. Add this to tensions in the Ukraine, and the low US dollar oil is surging this morning jumping $1.22 to trade at 103.81 while Brent oil has added $1.77 to trade at $1.1083. Combine weather and war and energy speculators are having a field day.

US WTI oil prices rose during last week. WTI oil inched up by 0.4% while Brent oil slipped by 0.8%. As a result, the gap of Brent oil over WTI narrowed again: The premium ranged between $6.48 and $7.82. Last week, the EIA’s weekly report showed a modest drop in oil’s stockpiles of 0.5 million barrels. Crude oil had been expected to decline to trade around the $100 mark with the temperature changes, but storms and geopolitical uncertainty has reversed that course as oil is now expected to continue to rise over the next few days.