Mike’s Take – Oct 16

Good Morning,

Weather turns neutral (from bullish) in SP15:

001_BurbTemp

While Mid-C temperatures drop and begin to assume an element of heating load-driven bullishness:

001_MidCtemps

And the rains are returning adding a slightly bearish twist to the drama.  The River Forecast Center seems to concur having added some additional energy to the back end of their 10 day, though they have tempered that additional water somewhat in the last two 10 day forecasts:

001_NWRFC10day

The northwest remains longer due to the DC cut:

001_MidCexports

And BC Hydro hasn’t helped the bullish cause by their aggressive selling of late (the change happened about the same time BPA restored the AC TTC earlier this week):

001_BCexports

All of this transmission work has rendered the ISO slightly more bullish:

001_ISOimports

Though the cuts on the DC have been mitgated by jacking imports from Mead and Palo:

001_ISOimportsSouth

All in all it’s a WYSIWYG world … what we saw this week most likely will extend into next week, but then things start getting more interesting.  The Diablo nuke will be then a week away from returning and the climatological cooler weather in the northwest will be raising loads:

001_MIDcLoads

while loads are shedding in the ISO:

001_SPloads

Both stacks in November are sitting on bullish inflection points though SP’s stack has equal bearish downside as upside while the MidC’s is more skewed towards bullishness:

001_MIDcstack 001_SPstack

render me a mini-MidC bull and neutral on the SP:

001_OppMatrix_MidCNov

The opportunity matrix has swung to a more bullish tone for all products given relatively low market prices.  Some of the other model sentiments for November and December (on peak) are expressed in the tables below:

001_DecOppMtx 001_NovOppMtx

I see no home runs, just lay down bunts and pop a single here and there and you are bound to push across a few runs over the next several weeks, though the season for home runs is fast approaching as we enter what should be one of the more interesting water years in the last decade, though the latest weekly El Nino indexes are now showing the 97-98 pulling ahead of the 15-16 event (2.6 vs 2.4 as of Oct 7).

Enjoy your weekend,

Mike