Mike’s Take – Oct 12

Good Morning,

Today’s outlook looks rather bland, at least on the surface.  North loads are at the seasonal trough and soon to rally hard while south loads are beginning the long slide into the bearish winter:

001_LoadsNorth 001_LoadsSouth

Temperature forecasts don’t portend any changes in the north but do bring a general cooling trend to the south:

001_Burbmax 001_PDXmin

The Mid-C will remain relatively dry for the next two weeks and the ISO may get a small storm.  The River Forecast concurs as they have materially cut their projected flows in the 10 day suggesting a possible bullish STP for tomorrow (assuming they don’t work on Columbus Day, otherwise the STP arrives this afternoon).


Those are big cuts (as of Friday, don’t think we get an update today) and if they carry through to the next STP it will be construed as bullish BOM.  I have to think that these cuts will carry into the Nov given that they have bloated the prompt with too much water, at least that is my opinion.


This picture just does not seem right.  Why would Nov have more water than Dec or Jan given that the latter has more load than the former and we have a dry 14 day precip forecast?   I’d be more inclined to suggest that at least the first two weeks will look more like Oct, or at a minimum, like Dec.  Either way I believe that Nov will get at least a 1000 MW haircut over the next few weeks.

Speaking of haircuts, check out the Ansergy load forecasts for SP and Mid-C:



Don’t bother cleaning your glasses, the SP15 chart is showing a 6,000 MW drop in loads over the next week or two…contrast that buzzcut with Mid-C’s 6,000 MW rally over the next 8-10 weeks.  No wonder the RFC has jacked flows in November, but where does that water come from if it doesn’t rain?   For the record, and to state the obvious, the cut in SP loads is about 3x greater than the energy loss from the DC.

Naturally reservoirs are refilling given the current bearish fundamentals with Coulee adding about a foot to its forebay elevation over the last week while cutting outflows:


The overall reservoir status has grown slightly more bearish (more water behind the dams) over the last few weeks – note the gap between the previous three years and 2015 narrowed this last week:


To further damping any BOM bullishness the wind blew, blew hard, over the weekend:


So, in sum, a lot of mixed signals in the current fundy outlook.  My take remains bullish on Nov Mid-C (on or off) and slightly bullish on Dec Mid-C; bearish on the Nov spread (either) and slightly bearish on the Dec spread.  Why am I bullish when y’all are surfing the bearish trend?  Because y’all are bearish, that is why.  Trend has never been my friend.