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line. "If you're looking for a comparison from last winter to this winter, I can tell you with 90 percent confidence that it is not going to be as warm as it was last winter. I can tell you another thing. The La Niña versus El Niño trend has definitely been following our forecast ever since last winter where we predicted that the La Niña would weaken to a neutral state by the early part of the summer and that it would become a weak El Niño, which it has." The result will likely be increased participation and lower tem-
peratures across the southern part of the United States including California. While the East Coast will probably not get huge snow- falls, it should be above normal compared to last year. "Another thing that happens is that unlike last winter we can
get very cold Arctic air that comes in and sticks around for a few days and then it's gone," said Boston. "It's not the type of thing that would put parts of the country in a deep freeze for a couple of weeks. The other thing that is going to greatly affect the winter is how much blocking we have in the North Atlantic. The North Atlantic oscilla- tion is a major index that tells you if the NAO is a negative value the flow across the North Atlantic Ocean is blocked so what that does is forces more cold air masses down into the eastern United States. Last winter, to give you a comparison, the NAO was positive almost all winter. I would be very confident that there would be consider- ably more heating degree days this winter than last winter."
He noted that while the confidence level was lower in the
Northwest, that region would probably receive an average amount of precipitation and likely above normal temperatures. "From the range of sources it appears we're going to have a
near-normal degree day pattern, and if we had normal winter temperatures, I believe that will be enough to tighten up supply a little bit," said Larkin. "So we like locking in some basis with the supplier ahead of time to cover yourself in the latter months in case there is a problem." While the winter temperatures will certainly impact vol-
ume, the traditional impact on product price is not as solid as it once was according to Larkin. "The heating component of the distillate pool has shrunk so considerably and the lat- est move by New York State only adds to it," he said. "If you had the type of winter we had last year six years ago that would've tumbled prices in a major way. Last year in spite of it being one of the warmest winters, the prices went up instead of going down. That is because heating oil is repre- sentative and the whole distillate pool is such a small number now that it doesn't really impact the movement of price. If it's warm, it doesn't mean the price will necessarily come down and vice versa. For us in the hedging world it definitely changes the game." l FON
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