U.S. and global oil demand will slip as winter weather ebbs in 2Q 2006, but crude oil prices will rise from winter levels, according to a close reading of the Energy Information Administration’s latest Short-Term Energy Outlook, which was released Tuesday.

The forecast, if borne out, will be another example that the cliche of a ‘’weak second quarter'’ may be true for oil demand, but isn’t true for crude oil prices. In the past two years, second-quarter crude prices have averaged above their first-quarter level by 6.7% and 8.8%, respectively.

In its report, EIA, the statistical and analytical wing of the Department of Energy, said it lowered its crude price forecast in the coming months due to lower products prices caused by warm weather and ongoing hurricane recovery efforts. The new 4Q 2005 forecast for U.S. benchmark West Texas Intermediate is a fix on an overstated projection last month. The revision puts crude in this quarter at $60.19 a barrel, compared with $60 so far in the quarter. That’s down from last month’s projection of $63.09.

But while EIA lowered the actual numbers in its near-term crude price forecast, it increased the rate of expected price rise in percentage terms. Last month, EIA had projected 1Q 2006 prices would gain by 1.4% from the 4Q 2005 price, but would dip by 0.4% in the 2Q 2006, to $63.75, or 25 cents below the 1Q level.
Now, EIA forecasts, 1Q 2006 crude will rise by 3.7% from the 4Q level, to an average of $62.42, and will rise by a further 0.9% in 2Q, to $63 - the highest quarterly price since the record high 3Q 2005 level of $63.19.
The expectation of higher 2Q oil prices comes even as global oil demand is expected to drop by 1.75% from 1Q and demand in the U.S. - the world’s largest oil market - accounting for 25% of global demand - will slip by 0.3%. Those projected rates of decline are just slightly down from the year-ago level.

EIA projects OPEC’s output will drop to 29.6 million barrels a day in 1Q and 2Q 2006 from 30.2 million b/d in the current quarter. So far, though, some members of OPEC, which meets Dec. 12 in Kuwait have given preliminary signs that they’ll keep output policy unchanged.

Only a steep slide in crude prices would force OPEC to change tack, and that doesn’t appear to be in the cards now. Not just because EIA is projecting gains - with 2006 crude expected to average a record high $63.33, up from $56.54 this year - but because oil futures markets continue to place a premium on forward contracts. That’s because despite all of OPEC’s manueverings, the cushion of spare oil output capacity won’t rise much and demand growth will continue next year.

And the world won’t be any less dangerous a place.

The trial of Saddam Hussein in a Baghdad court room isn’t lacking high drama, grisly testimony or bizarre theater. What it does lack - so far - is any testimony directly linking the former Iraqi leader to the killing of 148 Shiite men in Dujail, north of Baghdad, in 1982. Saddam and co-defendants have pleaded not guilty. By all accounts, the testimony and Saddam’s responses have been shocking. While the case is far from finished, evidence tying Saddam directly to the charges will need to come sooner, rather than later, to calm the theatrics. Many commentators across the global have expressed unease about Saddam being tried in Iraq, instead of an international tribunal under the auspices of the United Nations.

While no one - but perhaps for Saddam and his attorneys - is predicting the former leader will beat the charges, there hasn’t been much talk of the possibility, save for an item on the Web’s Drudge Report which said the White House has a plan to deal with that outcome. A ‘’top Bush source'’ was quoted as saying that more charges would be filed, and still more, if Saddam is acquitted on the current case. Prosecutors reportedly will present a videotape of Saddam issuing assassination orders. Restraint and jurisprudence will be the best weapons for the prosecution. Though it wasn’t a criminal trial, the nagging reminders of Kuwait’s over-reaching campaign to win U.S. military action to push Saddam out of Kuwait in 1991 come to mind.

Back then, Kuwait hired a powerful U.S. PR firm to help present its case, which included graphic claims of widespread episodes of babies being ripped from incubators in Iraqi hospitals. It later turned out that a witness, testifying before Congress in secret to protect her identity, was actually the 15-year-old daughter of Kuwait’s then-U.S. ambassador, Sheikh Saud Nasser Al-Sabah (later its oil minister), and the events described were hyped. For justice to be done that will stand the test of history, not just hurriedly end an historical chapter for political purposes, only the unvarnished truth will produce a fair trial - and a fair verdict.

A visit to Dharan, Saudi Arabia, by a reporter from The New York Times yields some interesting color and an exotic dateline, but story Tuesday doesn’t shed much light on what’s motivating the world’s largest oil producer and exporter.

The story attempts to unwrap the enigma in the sand, but falls far short for one crucial reason: It doesn’t address the Saudi view of appropriate oil prices.

Saudi Arabia’s thinking has evolved over the years since it was ‘’swing producer'’ more than 20 years ago. Back then, it would single-handedly take on the burden of cutting back output deeply to try to artifically support prices. Trouble was, their OPEC brethren - and major non-OPEC players - were boosting output and raking in more revenue at the expense of the Saudis. Since then, even if it’s just a cosmetic move, the Saudis have insisted that all of OPEC (and at times some non-OPEC fellow travelers) cut output when prices are under severe pressure.

What’s crucial about the recent market situation is that the Saudis have noticed that steadily rising oil prices over the past few years haven’t hurt the world economy or significantly lessened oil demand. And the world’s biggest oil producer and consumer, the U.S., hasn’t pressured the Saudis to see it any differently.

What the Saudis see as the appropriate price for oil - and how low prices would go before they would cut output is the crucial question for the global economy. Some hints may be forthcoming at the Dec. 12 OPEC meeting in Kuwait, but don’t hold your breath. Oil Minister Ali Naimi likely will resist talking about appropriate prices while the market is strong heading into winter.

Naimi recently declared the market situation as ‘’beautiful,'’ applying the one true rule of OPEC. Whenever a minister comments on the status quo - the status quo immediately changes in reaction to the comments. In this case, Naimi’s apparent content was a reason to push prices up by $2-$3 a barrel.

With little incremental output capacity coming on line for the next couple of years, oil prices are likely to be underpinned around current high levels. But the Saudis seem fine with that. Much will depend on how much the Saudis and the rest of OPEC trim output when demand hits seasonal ebbs. The Saudis, ensconced as price-takers, rather than price-makers, in recent years are likely to take a cautious approach, allowing stocks to build modestly, while avoiding a price collapse.
At times, the Saudis and their secretive ways seem to be their own worst enemy from a political perspective. And the kingdom’s refusal so far to clarify their market aims only adds fuel to the fire of the vocal minority of analysts who claim Saudi output is nearing its peak.

Saudi output restraint and capacity investment restraint in recent years has been based solely on political decisions - not the conditions of oil reservoirs. And so far, the world economy has proved them right.

The record-breaking 2005 hurricane season officially ended less than a week ago. So, it is time to start buying plywood, nails and duct tape - and energy futures - ahead of next year?

Veteran Colorado State University hurricane forecaster William Gray predicts 2006 will be active, but not as severe at this past season, which damaged oil and gas producing and processing facilities along the Gulf Coast. Gray, who has been making predictions for 22 years, gives the following rundown for next season: 17 named storms, 9 hurricanes and 5 intense hurricanes. That compares with the record 26 named storms, 14 hurricanes and 7 major hurricanes this past season.

News of Gray’s forecast is here, while would-be weathermen who want the technical assessment straight from the source can find the original report here.

For the Gulf Coast oil region, Gray’s nutshell forecast is: likelihood of tropical storm 74% (vs 59% over the past 100 years); likelihood of category 1-2 hurricane 61% (vs 42%); likelihood of category 3-4-5 storm 47% (vs 30%); likelihood of all hurricanes 79% (vs 61%); likelihood of named storm 95% (vs 83%).

It’s worth noting, too, that the professor’s forecasts for the past three years have underestimated the extent of the hurricane season. For 2005, Gray forecast 11 named storms, 6 hurricanes and 3 intense hurricanes.

Exxon Mobil on Monday announced a return to doing business with Libya while seeming to downplay the news under the cryptic headline: ExxonMobil Signs EPSA IV Agreement for Exploration in Offshore Cyrenaica Basin.

Exxon confirmed that its subsidiary, ExxonMobil Libya Ltd., has signed an exploration and production sharing agreement, or EPSA, with Libya’s National Oil Corp. to begin exploration offshore Libya.

The agreement covers the large Cyrenaica Basin Contract Area 44, which was awarded in the second round of EPSA IV licensing in October. The contract area comprises 2.5 million acres and is located offshore in water depths ranging from 10 to more than 10,000 feet.

“We are pleased to be back in business in Libya with our success in the second licensing round,” said Phil Goss, President and General Manager of ExxonMobil Libya. “In the past we worked closely with our Libyan partners to achieve many firsts in the Libyan petroleum industry, such as discovering and producing the first Libyan oil field, shipping the first oil to market and building the Marsa El Brega facility including the LNG plant. We look forward to working with the NOC and Libyan government to achieve great successes in Libya once again.”

In 2003, U.N. sanctions were lifted on Libya and in 2004, the U.S. lifted sanctions. U.S. crude imports from Libya, resuming for the first time since 1980, averaged 18,000 barrels a day in 2004 and in the first nine months of 2005 have averaged 43,000 b/d, according to the Energy Information Administration.

OPEC ministers, ahead of their Dec. 12 talks, are saying they want to keep output policy steady and oil prices near current levels of $50 for their reference basket (about $57 for US benchmark crude). That sets the stage for a potentially routine meeting. But there’s an interesting twist to the upcoming talks.

Typically, OPEC holds its winter meeting in Vienna, where the group established its secretariat 40 years ago. TV pictures beamed back to trading desks, of ministers clad in bulky coats and reporters scurrying among snowflakes, may add a psychological boost to prices. More than one minister over the years has emerged from his Mercedes, turned his collar up to a hawkish wind and had his declaration that frigid temperatures are good for demand flashed instantly around the world.

But what is the market to read into the venue for next week’s talks?

OPEC returns to Kuwait for the first time since 1973, a meeting at which the group set a fixed selling price of $5.12 a barrel. And, as OPEC’s official history tells it: “It was the first move by Member Countries to exercise their sovereign right to determine the price of their natural resources. From this point on, OPEC assumed the power to consider and set prices unilaterally for its oil.'’ Two months later, OPEC doubled prices to $11.651/bbl.

The rise of the futures market and non-OPEC competition have taken away OPEC’s unilateral power, but it still has considerable clout.

Rather than shiver from the Vienna cold, though, ministers are likely to sweat through temperatures near 90 degrees Fahrenheit in Kuwait.

Potentially the most onimous sign is the gathering’s status as the first winter meeting in an OPEC member country since 1997’s disastrous Jakarta talks. Back then, Saudi Arabia pushed OPEC into a 2 million-barrels-a-day rise in output quotas that was poorly timed with the start of the Asian economic crisis and an unusually warm El Nino winter in the Northern Hemisphere. Crude prices fell 16% in the months after the meeting, the start of a free fall that took more than a year to correct.

Still, recent history suggests there’s little OPEC can do next week to keep prices from rising. In the past six years (whether the group met in Vienna or non-member Egypt), oil prices have averaged 1% to 15.2% higher in the three months after the meeting than in the month in which the winter meeting was held. That translates to $60 to $68.25 in the first quarter of 2006.

It’s hard to believe Hugo Chavez was on the ropes just two years ago. Venezuela’s oil industry was paralyzed by a crippling strike and exports were choked off to its most important market - the U.S. - at the start of the winter.

Fast forward to a buoyant Chavez, claiming a greater mandate in a parliamentary vote boycotted by rivals, and some very curious doings by the man who dreamed of stardom in the Bronx.

While Chavez grew up with aspirations of playing baseball in Yankee Stadium, his latest endeavor is to provide low-cost heating oil to residents of the New York borough. Plans are set to be announced Tuesday, when the city may be under several inches of snow, and follow a similar offer of 12 million gallons of discount heating oil in Boston last week. Venezuela, which owns Citgo, the huge U.S. fuel retailer, offered the oil as prices soared in the wake of Gulf Coast hurricanes.

What Chavez wants to accomplish from the move - apart from burnishing his image with some in Washington even as he falls further out of favor with the Bush administration - isn’t clear. But the move is certain to make him more of a thorn in the side of the White House. Chavez has flat out accused Bush of plotting to overthrow him and said the U.S. was behind the election boycott. His relations with Cuba’s Fidel Castro and his support for Iraq’s Saddam Hussein, despite global sanctions, rankled the White House. While oil exports have stablized at normal levels and Caracas ranks reliably as the U.S.’s fourth-biggest source of crude, the feud grows. It came to a head last month at the Americas summit in Argentina when Chavez, a former paratrooper who once tried to seize power in a coup, claimed credit for sinking a regional free trade agreement sought by Washington.

Now Chavez is being viewed favorably in parts of the U.S. where he’s scarcely been heard of.
Maine’s Gov. John E. Baldacci, a Democrat, is trying to rally other Northeastern governors to press the Bush administration for more funding under a federal fuel subsidy program for low income residents known as LIHEAP. But so far more funds haven’t been forthcoming, and Maine, too, is in talks with the Venezuelans.

‘’If we only imported oil from the countries whose politics we agreed with, we’d be very cold and we’d probably have to go back to the horse and buggy,'’ said Beth Nagusky, the Maine governor’s top aide on energy matters.

While cold temperatures are just now arriving in the Northeast, the Energy Department shows residential heating oil prices have dropped by 9.4% in the region in the past nine weeks. Residential heating oil prices in the first week of October are the high for the season so far. In eight of the past 15 years, the first week in October registered the lowest price in the heating season.

Nymex January crude oil surging Monday to return firmly above $60 as the season’s first snows and continued cold temperatures chill the Northeast. With OPEC meeting Dec. 12 and expected to continue to pump at current levels, future moves will be based on weather-related demand, expectations of weather-related demand or lack of weather-related demand.

The key: how will commodity funds - with significant short positions - align themselves heading into the new year. Oil analyst Kevin Norrish and others at Barclays Capitaltell investors Monday:

Speculators have historically never held such substantial short positions in commodity markets. Aggregate net length across the major US commodity futures markets rose again to a fresh all-time high last week of almost 975,000 lots. These short positions are concentrated in energy and grain markets where funds are net short, but there are also significant gross short positions in copper and gold. Given the improving economic outlook for 2006 and the strong fundamentals in many sectors, we suspect that year-end short covering could add additional upside price risk for many commodities over the next few weeks.

Barclays said ‘’increasingly positive demand picture for US gasoline'’ also suggests more short-covering. US benchmark WTI crude expected to average $62.60 in 4Q ‘05, slipping to $58 in 1Q ‘06 before gaining to $62.1 in 2Q ‘06.

With oil prices up 36.5% this year and producers keeping taps wide open, where are all those petrodollars flowing to? One clue comes Monday from a report by the Bank for International Settlements. In a quarterly report, BIS said oil-exporters are pumping a bigger share of their wealth into dollar-denominated assets in the past year.

While Saudi Arabia, its Gulf neigbhors and fellow OPEC members have pledged to boost investment in the U.S. oil refining network, after oil prices shot up above $70 a barrel due to tight petroleum products supplies, no concrete plans have yet emerged. In fact, Kuwait, following the Saudis last week, plans to boost its presence in China, where rampant growth in oil demand has underpinned the near-term forecast for oil prices.
Investors from Dubai recently announced they’re putting their petrodollars into the regal Essex House hotel in New York City. Despite the prime location in the heart of the world’s largest heating oil market, there’s no word that the $50 million renovation will include an oil refinery.

Some others in the hunt for petrodollars have been rounded up at
Roubini Global Economics.

The Bush administration has come under fire for paying Iraqi newspapers to publish ‘’good news'’ stories. Headlines Monday of a surge in Iraqi oil revenues this year seem to be the kind of news Washington would love to see - and it didn’t cost a dollar or even a dinar.

But, as ever with Iraq, just as the oil bubbles slightly below the surface, so does the truth. It’s a fact that oil revenues are expected to reach $23 billion this year, compared with $17.5 billion a year ago. ‘’The budgetary position in 2005 has improved substantially,'’ the report said.

The trouble is that while Iraq is joyous about at 31.4% rise in revenue, global oil prices are rising this year at a rate of 36.5%. That’s a substantial difference in what Iraq should be earning if the oil industry was approaching anything close to normal. As Dow Jones Newswires reports:

‘’The report, called ‘’Iraq, as a Democracy: Progress and Challenges,'’ didn’t refer to losses incurred by the Iraqi oil sector due to sabotage of Iraq’s oil infrastructure.'’

According to the oil ministry, Iraq has lost around $11.35 billion in damages to oil facilities, cost of repairs, and lost export revenues in the time since exports resumed after the war and the end of May 2005. The report, from the prime minister’s office claims Iraq’s oil output is near pre-war levels at 2.3 million barrels a day, but oil officials and analysts put it near 2 million b/d. Exports are claimed to be 1.7 million b/d, but are reported by oil officials at only 1.4 million b/d.

Iraq has been consistently missing oil output and export targets, despite optimistic projections. The tone for such optimism was set by U.S. Vice President Dick Cheney, who famously told a journalism convention in April 2003 - just weeks after the start of the war - that he expected Iraq to be pumping “back up on the order of two-a-half, three million barrels a day within - hopefully by the end of year.'’

Elsewhere, a top Iraqi official took exception to U.S. claims about the potency of Iraq’s security forces.
A further report contends there has been a 70% decline in insurgent attacks.

Bottom line, with oil as with security, which go hand in hand: Iraq ‘’has a long way to go.'’

While the U.S. and China continued sniping over the details of the Kyoto Protocol aimed at cutting polluting carbon emissions, a key U.S. senator has emerged as a voice of reason, calling, in effect for a combined Long March toward energy security for the two major consumers. Sen. Joe Lieberman, D-Conn. told the Council on Foreign Relations on Wednesday that the U.S. - the world’s largest oil consumer - and China - with its soaring oil demand growth - are on a collision course for future supplies, and should be acting as partners, not rivals.

‘’It’s time for the U.S. and China…to begin to talk more directly about this global competition of oil,'’ he said. ‘’Wars have been fought over such competition for natural resources. If we let it go, this could end up in a real military conflict.'’

Lieberman argues it ‘’makes sense'’ for the two biggest oil consumers to cooperate on use of more secure, renewable energy supplies. He noted China’s demand is forecast to double in the next 20 years, while U.S. use will grow by 40% in the same period.

He also called for China to join the Internatonal Energy Agency, the West’s energy watchdog.
While Lieberman made his call, China told a U.N. conference on cutting emissions that the U.S. should join the Kyoto treaty, rejecting arguments that it is flawed because it fails to restrict emissions from developing countries. Associated Press quoted Sun Guoshunis, a senior foreign ministry official, as saying China was cutting its pollution and that it was unfair to ask people in impoverished nations - such as China and India - with the world’s largest populations - to cut back on energy use. The U.S. - the world’s largest polluter - has called for a reduction its emissions, but won’t sign on to the Kyoto pact. IEA’s Chief Economist Fatih Birol estimated that by 2030, the increase in carbon dioxide emissions from China will be 30% greater than the combined CO2 emissions from the U.S., Canada, Japan, Australia and others combined.

On the other side of the world, Saudi Arabia was confirming its plans to gain a greater footing in China’s growing oil market. An official of state-owned Saudi Aramco said plans are afoot for building a 250,000 barrels a day refinery in northeast China’s Qingdao area in addition to on-going plans to triple capacity at the 80,000 b/d Fujian province refinery in the southeast.

Unlike in the telecoms industry, where the population of developing countries go from no telephone at all to the most modern of cells phones, the transportation sector seems on an inevitable path of old-fashioned cheap and dirty fuels as the make the great leap forward into the auto age. And that’s just the way that Saudis and their Middle East neighbors, holding the lion’s share of global oil reserves want to see it for decades to come.

While oil producers and consumers made news recently at talks in Saudi Arabia by seeking assurances from each other about supply and demand outlooks down the road, one consuming country’s decidedly different route to the future has received scant notice.

Sweden announced plans last month for an ambitious detour on the global path toward increased hydrocarbon consumption: No More Oil.

Prime Minister Goran Persson announced he would head a commission aimed at phasing out completely the country’s dependency on oil by 2020. In 2004, Sweden, which is heavily dependent on nuclear power for its electricity, cut its oil use by 3.9%, to 319,000 barrels per day, while global oil demand rose by 3.1%, according to the BP Statistical Review of World Energy.

Its consumption - about as much as Hong Kong or the United Arab Emirates - amounts to just 0.4% of global demand. Alone, that’s hardly enough to give Saudi Arabia Oil Minister Ali Naimi shivers, or to make his call for a ‘’road map'’ for future oil demand more genuine. The world’s oil consumers can’t make intelligent predictions on far-out oil demand without a clear signal from the world’s biggest oil producer and exporter of what crude oil price they will defend in the future.

Naimi should know full well that you just can’t get a free map at a gasoline filling station anymore.

Sweden’s anti-oil stance comes as the government is fully buying into the idea that ‘’climate change is the greatest and most important environmental challenge of our time.'’ That thinking is far from taking a firm hold anywhere else, particularly in the U.S., where government forecasts call for gasoline demand to rise by 17% by 2012. Sweden’s initiative may take hold domestically thanks to national culture and dedication - think of the dramatic growth of IKEA into the world’s largest home furnishings store, covering the globe will all those assemble-yourself cabinets with drawers to hold all those small black wrenches.
But Sweden’s government isn’t fooled by the considerable hurdles.
‘’The real challenge will be to substitute gasoline and diesel oil in the transport sector,'’ said Persson. After that, it seems, the plan would proceed smoothly.

Sweden’s ambitious notion may face a political detour, though. Persson, seeking re-election next September, reportedly may face a no-confidence vote for failing to mobilize a rapid response to the last year’s Asian tsunami, which claimed the lives of more than 520 Swedes.

‘’Beautiful'’ was the succinct summation of the oil market Saudi Arabian Oil Minister Ali Naimi offered earlier this week. Naimi, OPEC’s de facto leader, was referring to prices stabilizing at around $50 for OPEC’s reference basket of crude and around $57 for the U.S. benchmark , with global inventories at what he reportedly called ‘’comfortable'’ levels.

So why would the market believe that OPEC’s position is essentially: You’re Beautiful! Now Change?

That kind of thinking can do more than just get you in trouble with your significant other. For the oil market, the damaging confusion comes in trying to balance Naimi’s comments with the remarks of Kuwait’s oil minster, whose words perhaps carry a mistakenly loud echo because he currently holds the title of OPEC’s president.

Sheikh Ahmad al-Fahd al-Sabah, the Kuwaiti, who will host OPEC’s Dec. 12 talks at which no formal change in oil production policy is expected, has said in recent days that OPEC wants to see global inventories rise.
The Kuwaiti said he has support for keeping OPEC’s official output ceiling unchanged and an additional 2 million barrels a day of production on offer, if needed. He also said he would be comfortable with commercial oil inventories in the major industrial countries holding 56 days of forward demand cover by the end of the first quarter.

According to the International Energy Agency, commercial stocks stood at 52 days of forward demand cover at the end of September. That means stocks would have to rise even as global oil demand in 4Q ‘05 and 1Q ‘06 rises by more than 2.5 million barrels a day from the third quarter and OPEC output has held fairly steady.

What’s more, al-Sabah’s 56-day comment was a rehash of a statement he made in mid-June that seemed out of the OPEC mainstream when he first uttered it . Since then, commercial stocks in the industrial countries fell to 52 days of forward cover from 53 days.

Commercial stocks haven’t been at the 56-day level since 2Q 2002, IEA data show. And stocks haven’t risen in the first quarter from the fourth quarter by anything close to the 4 million barrels the Kuwait is targeting, since 1996. Oil prices fell by 7% in that period, which would translate to a drop of more than $4 a barrel to near $55 today.

The market reality is likely to be that - with the Saudis content with the status quo - OPEC output may creep up slightly as winter demand emerges, but there won’t be any overt, full-throttle production rise, barring some major catastrophe in a producing country. That means commercial stocks will grow and oil prices will ease only by the extent that demand drops off at the end of winter.

Beauty is indeed in the eye of the beholder and part of the beauty of OPEC’s machinations in its 45-year history is that it’s never crystal clear what the group’s precise aims are.

At such times, bet on the Saudi view to prevail. And Naimi thinks things are beautiful.

He may do well, though, to recall Socrates, who said: ‘’Beauty is a short-lived tyranny.'’

-It was a November to remember for the heating oil futures market, with a 14% price swing leading into a sweater-shedding drop to below $1.60 a gallon - the lowest price since late July - as the December-delivery contract expired. While it wasn’t exactly July weather, November was warmer than normal in the New York harbor region - the world’s largest heating oil market. While some in the market talk about what wasn’t: cold weather - let’s talk about what was: an impressively accurate weather forecast from a perhaps surprising source - The Old Farmer’s Almanac.

In an age when TV weathermen are quoting the latest Doppler 6000 data, the Almanac makes weather forecasts based on a proprietary formula developed by its founder, Robert B. Thomas, back in 1792. Its yellow cover still features a nail-hole for hanging on the outhouse door and its forecasts are tucked in among planting tables, tips on animal husbandry, recipes and quirky tales like ‘’How To Teach Old Chickens New Tricks.'’ It claims an 80% seasonal accuracy rate over the past 214 years - but as oil traders will inevitably ask: What has it done for me lately? For November, the Almanac’s forecast - prepared by Accu-Weather using Thomas’ age-old secrets based on tracking sunspot activity was on the money. In the Atlantic Corridor - from Boston to Richmond, Virginia - the forecast called for temperatures 4 degrees above normal in the north and 1 degree above in the south. The bulls-eye of the region is New York City, where temperatures were smack in the middle of the range at 2.7 degrees above normal.
And the Almanac’s winter outlook suggests the Nymex price rally since December’s expiration may be well supported for the next couple of months.

December’s average temperature will be 6 degrees below normal; January 2006, 7 degrees below normal; February 7 degrees above normal and March 1 degree below normal.

The end of November was supposed to bring the end of hurricane season to the U.S. Gulf Coast region. But as this record-breaking season has shown, if Mother Nature pays little heed to man-made inventions such as buildings, oil rigs and refineries, what respect will she have for a calendar? History suggests that after suffering through Katrina and her evil twin, Rita, the key oil producing and refining region is in for a respite as rebuilding continues. In the past century, only 1 major hurricane has made landfall in Texas or Louisiana after September, according to the U.S. National Weather Service.

That’s some solace as trackers report that Hurricane Epsilon has formed in the Atlantic, but doesn’t appear to be a threat to land.
While the worst of this hurricane season is past, forecasters warn that we’re in a violent, active cycle for years to come.