Good Morning,
BPA has down-rated the AC to 3800 mw for the near term and flows have dropped accordingly:
Mid-C to NP15 Transmission Flows (actuals):
On the surface it should not be a big deal, but any cut is bearish Mid-C and bullish the spread. While we are on the subject of TTC, BPA is projecting more work on the DC next fall with the line ratting set to 0 (ZERO) for all of October. It’s only a month, but a month can grow to two months so keep an eye on it, we wil.
BC Hydro has ramped up its exports into Mid-C over the last couple of days:
No doubt the Canadians are feeling a bit long, and the wait for bulllish markets in the USA grew tedious, so they ramped up their exports, or they looked at the weather forecast and realized that current prices are as good as they will get.
Weather Forecast – Mid-C Composite:
These two plots (Min Temperature and Total Precip) are both today versus three days back. Northwest temperatures are 3-5 degrees warmer than the start of the week (in days 1-10) and that storm we first took note of in the 11-15 has not gone away, and is now 8-13 days out, and has not diminished.
Here is a change for you, instead of posting Min Temperatures I am going to show you some Max Temps – for Burbank, CA:
Weather Forecast – Max Temps – Burbank, CA:
Yes, you are reading that correct – 81 degrees. I’ve seen summer days in the 80s, a lot of them, at Burbank. Hard to see many folks flipping on the air conditioners when the low is in the low 50s, but still, it’s 81 degrees in February. A warm spring anyone? Early runoff amidst the flood control draft … 2000 all over again. Nah, unlikely, but anything can happen.
What will happen, next week, will be a new Flood Control guideline released by the Corps of Engineers. That will be based upon the official water supply forecast as of Feb 5 adjusted for the near term precip on that day.
Those numbers are up from the Jan values used in Flood Control – not by much, just 1-2%. Even though we are deep into this water year – about 70% deep – a lot can change between now and the end of the build season.
This year is now above last year and look what happened in 2015. Look also what happened in 2013 and 2014, both years were at about the 2016 levels and ended up well above normal. Given an approaching storm, and current snow pack, I don’t think this year is high enough:
Take the Flathead, as a case in point. The Water Supply forecast is a modest 85% of normal yet the snow anomaly is 98%, and we are at least 70% through the water year.
I can’t close without throwing out a bullish bone, one that is provided by the River Forecast Center via its 10 day forecast.
Northwest River Forecast Center – 10 Day versus STP
Take note of the cuts in the last two days, cuts even from this week’s STP. If those cuts hold by week’s end it may portend a bullish STP next week.
Given all of the above I am bullish California BOM and bearish the Mid-C. I still like the March-April Mid-C roll with the one handles and our Q2 outlook (Mid-C) is bearish but tempered by the already low prices.
Mike