Can You Trust the Weather? Exploring the NOAA Winter Forecast

Once again, the weather was high among oil market headlines yesterday, though this time the news was more constructive. The National Oceans and Atmospheric Administration (NOAA) is predicting a warmer winter throughout most of the US, with only the Pacific Northwest forecast to experience below-average temperatures. The group is also forecasting a wet winter in the north, with drier conditions in the South. Although the forecast is positive for consumers, how much faith can you have that it’s correct?

Going into the 2020-21 winter season, NOAA published a similar forecast – warm weather in the south, colder temperatures in the Northern Plains region. A key part of that forecast was the emergence of La Nina weather patterns, which we noted are also in effect this year. In NOAA’s lookback, however, they acknowledged that actual weather was nearly opposite their forecast. Winter storms ravaged the south, causing huge energy disruptions in Texas and Oklahoma while the Northern Plains was warmer than average.

We all know that weather forecasts can be wrong (sometimes, it seems like they’re always wrong), but the fact that the agency is performing lookbacks is a good sign. Even the best baseball players strike out sometimes, and weather agencies are the same. The chart below shows how accurate NOAA seasonal forecasts have been over the past five years, with 0 being equal to a random guess, 100 being a perfect forecast, and 50 being a perfectly inaccurate forecast. On average, NOAA does pretty good in their guesses, but it’s also not unusual to see incorrect forecasts.

So if you’re a fleet manager, how do you prepare? Should you trust the forecast, or gear up for a freezing winter and operational disruption? The best approach comes from the old saying: “Hope for the best, plan for the worst.” Having a winter fuel plan (as well as an all-weather emergency supply strategy) is critical to protecting your fleet all winter long. Not sure if your fleet is prepared? Contact a cold weather fueling expert or emergency fuel strategist to test your approach and future-proof your fuel operations.

Market Condition Report - Disclaimer
The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.

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