Are you ready for next winter?
Most of the lower 48 United States will be reading this after experiencing bone-chilling cold and snow in the middle of January 2024. While current weather may be warmer than the prior two weeks, it is still the middle of winter and spring is almost two months away. So why should you be concerned about next winter?
Why you should be concerned about NEXT winter
The major reason you should be concerned about next winter is because the fuel industry is already thinking about next winter. More specifically, fuel producers are already pondering how to sell their product for the next 12–15 months.
Cold winter weather leads to thoughts of supply planning
Winter is synonymous with cold weather, and cold weather causes people to think about staying warm. To stay warm, almost every home, business, and individual uses some form of fuel to create or generate heat. One prominent fuel used to generate heat is propane, and it is this fuel we are talking about.
Propane, as a heating fuel, is vitally important during the cold winter months. Distributors and their customers alike know how crucial it is to have a supply plan in place before temperatures drop.
Once the supply plan is made and temperatures drop, why do you even need to think about NEXT winter? The answer is that many things can crop up throughout the year which could impact your current supply plan, as well as any future planning you do for the next cold season.
Things that impact supply planning
Traditional 12-month cycle
In January and February producers in the Marcellus Shale region begin searching for buyers of propane (and other products) for the next traditional 12-month cycle, running from April to March. These transactions in turn can influence producers in Western Canada.
Global price influences
As the world’s leading exporter of propane, the United States encounters global price influences that always impact supply prices. These price impacts affect three areas of North America – the East Coast, the U.S. Gulf Coast, and the West Coast, and can have a ripple effect through the rest of the continent.
Timing of important industry seminars and conferences
Finally, many important industry seminars and conferences take place in late February and early March which can also impact supply pricing for the coming year.
Westlark Advisors is already thinking about NEXT winter!
Propane is an essential fuel during the months of winter heating demand. However, issues throughout the year can impact the preparation for and purchase of supply to feed this demand. That is why the Westlark Advisors team often says our supply planning process can easily encompass 9–12 months every year.
We want to encourage every propane distributor to enjoy the cold weather and make the most of it. But keep in mind that preparation for the next cold weather season has already begun. To find out more about how you can start preparing now for next winter, contact a Westlark Advisors team member today!
Are you ready for NEXT winter?
By JD Buss
