Good Afternoon,
We got some action on the STP today – a nice 1 gig bom haircut:
The trailing months also had modest cuts – clearly the RFC is getting the same weather forecast as Ansergy and the once again tipped their hand in this morning’s 10 day:
Given a 10 day dry outlook, and cool to cold, we’d surmise that more cuts in the front are on the way.
The daily shape of the associated STP energy suggests/reinforces that view:
It is striking the volatility the water pros have in those first 15 days…too much volatility in our opinion. I still don’t buy into the steady cuts through the end of February – if its reality would make for a bullish Q1. They already have this year’s forecast as the most bullish in the last four years:
Can’t argue with the relative values (versus prior years) but still think the amount of energy in this forecast is understated and I’d expect to see Jan and especially Feb get bumped at some point.
Cheers,
Mike