In my previous posts, I discussed the typical day of an energy trade floor meteorologist in two parts: Part 1 and Part 2.   In today’s post, I’ll talk about why I believe Energy meteorologists should be careful about using the words “bullish” or “bearish” on the Energy Trade floor.

In stock market terminology,  “Bullish” is generally referred to a potentially upward trend in prices.  “Bearish” is generally referred to a potentially downward trend in prices.   I’ve massively simplified these definitions

However, I’ve seen a lot of meteorologists throw around these terms on the trade floor when talking about the weather.   Frankly, I’ve done it myself and traders have called me out on it too.

For example, if I went to a trader and said, “it’s super cold (30s for highs) in the East for the 6-10 day outlook maps…it’s “Bullish”.    Although it sounds perfectly fine, it’s not necessarily true.  There may be an oversupply of Natural Gas with higher storage levels.  The Midwest and Texas (major demand areas) may actually be mild (or warmer than normal).  Natural gas prices may not necessarily move higher (or be bullish) because it’s cold in the East.  Bottom line, it wouldn’t necessarily make it “bullish” price.

So energy trade floor meteorologists should be careful not to use these terms without knowing what is going on in the Natural Gas/commodities markets.  If they want to use these terms, they should also pay attention to other fundamentals because weather is not the only driver of Natural Gas prices.

Many traders do complain that energy trade floor meteorologists should not be in the business of telling them whether it is “bullish” or “bearish”.  They should just stick to the weather and leave that interpretation up to the trader.   I think they’re right with the exception that the meteorologist is also aware of the other fundamentals and would be able to defend their statement.

I personally like using the following:  the weather is “supportive” or “not supportive”.   Or if a new weather model is colder than the previous run in the Winter…one can say it’s a ”supportive model run.”  This way it’s in reference to the weather and less to “price”.

But there are some traders that do like it when their meteorologist says “bullish” or “bearish”.   They generally understand that the meteorologist means it’s in regards to the “weather”, and not to the “price”.   It’s really up to the trader.

The bottom line is, the energy trade meteorologist needs to understand how each trader operates.   They all have different personalities, they all have different methodologies for trading, and they want their products communicated in various ways.   So a large portion of your job as an energy trade floor meteorologist is to be great at customer service.  Understand your customers and you’ll know whether it’s appropriate to use “Bullish” or “Bearish”.

If any energy trade floor meteorologist has any thoughts or opinions on this based on your own experience…would love to hear them! (Photo credit:  thepicky.com)