Good Afternoon,
The feds published their 120 day late this afternoon, and it is quite interesting:
Monthly Energy Equivalents
May and June are not overly intriguing, but July about made me fall out of my chair.
Energy Scorecard:
- May – Unchanged (yawn)
- June – Down 550 aMW (see daily below for timing/shape)
- July – Down 3400 aMW. Breath deep and slow, yes, down 3400 aMW …. long the July|June roll anyone (besides Ansergy)?
- Auggy – down 1000 aMW; not epic cut, but materially bullish
- Sep – down a gig like her cousin, Auggy
I don’t know where these #s come from, at least the radical departure from recent forecasts. I suspect it is what we suspected all along – a water year that wasn’t that big, or maybe it once was that big but warm weather had castrated most of the bearishness out of the outlook. We’ve pointed this out with our SWE tables – this is not as a big a year as 2014, yet the RFC has blindly projected more energy equivalents than 2014. I guess the boys and girls in the City of Roses finally woke up and checked out SWE – about time.
Daily Energy Equivalents
June was off, but all the changes are on the back end, beginning around June 20. Let’s dive deeper …
By the end of the month, the Trumpsters have shed 3000 aMW of EE, but the big cuts start in July. We might suggest, or at least point out, that some of the cuts have been irrationally exuberant and probably they cut too deep. Now the Federales are projecting WY17 to be 2000 aMW of EE below normal. Oops, let’s all chant “whipsaw” at the same time.
Year on Year
WY17 is on par with WY14 for May, above in June (perhaps more cuts in that period to come?) and below in July and Aug. We feel this forecast is more in line with our view, though we suspect there will be more intra-period shuffling of energy. If we were to guess, we think June might see the knife once or twice more, and possibly Sept as it is above WY14.
Cheers,
Team Ansergy