Author

JD Buss

J.D. Buss, CPA, CTA, has been the president of Westlark Advisors since he purchased the company (formerly known as Twin Feathers Advisors) in December 2021. He has worked with companies throughout North America, the Caribbean, Central America and beyond regarding supply and hedging strategies. To find out more about the Westlark team, go to westlarkadvisors.com or contact Buss at [email protected].

  • Feature Articles

    Propane Supply: Once Bitten, Twice Shy

    By JD Buss… Merriam-Webster defines this phrase as “a person who has failed or been hurt when trying to do something is careful or fearful about doing it again.” Another dictionary search placed the origin of this phrase in the year 1894. A 120-plus-year-old phrase may be the best way to describe the domestic propane distributor’s response to this year’s COVID-induced supply season. March 11, 2020, saw an end to the NBA season. In the next 24 hours propane conferences across the U.S. began to be cancelled. Within four days, most of the U.S. had gone on a lockdown. Then North America’s lockdown soon became a cry for the energy sector’s lockdown as well. CHAOTIC SITUATION Over the ensuing weeks, phone call after phone call...

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  • Feature Articles

    Propane Market Flips From Backwardation To CONTANGO

    (October 21, 2019) — By J.D. Buss… In October 2018 we wrote about a “tectonic shift” that had taken place in the propane markets during the last two years. What was that shift? The forward propane price curve changed from a traditional contango market—meaning future prices are higher than current prices—to a backwardated market, where current prices are higher than future prices. Fast-forward to the current situation and we view another shift in the propane forward-price market, where a traditional asset has come back into prominence and a slew of infrastructure plays are helping to give a future view on the propane marketplace. “Follow the Money!” The oft-used expression, “follow the money,” can help explain where domestic propane product is moving and the economic value...

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  • Feature Articles

    Heads Up! Market Flips from Contango to Backwardation

    By JD Buss… A tectonic shift has taken place in the propane market the last couple years. The shift occurred in the latter part of the fourth quarter in 2016 when traditional price methodologies began to be turned upside down as the propane forward price curve did an about-face, flipping from the consistent contango price spread to the world of backwardation. In the “Futures and Options” study guide provided by the Institute for Financial Markets (copyright 2003, 2009) backwardation is defined as the “market situation in which futures prices are progressively lower in the distant delivery months, also termed an inverted market.” We have a snapshot below of the Mont Belvieu propane forward price curve for several dates during 2018: We see in the graph...

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  • Feature Articles

    The Times They Are A-Changin’

    By JD Buss… “Widespread daily record low temperatures and record cold high temperatures were set from Dec. 27, 2017 to Jan. 7, 2018,” per the Weather Channel. Some specific stats from this past winter: 1. New York City set a record low for the first seven days of January, averaging 16.4ºF. 2. Pittsburgh broke the 1879 record of the coldest first week of January. 3. Raleigh and Charlotte, N.C. saw their coldest first week of the year, breaking the 1887 record. 4. New Orleans tied its coldest first week of the year. The map from the Southeast Regional Climate Center highlights the extreme cold temperatures for a strong portion of the Eastern U.S. in the first week of January. To propane retailers, this weather pattern might have signaled the...

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  • Feature Articles

    Will the Revolution Continue?

    Revolution: A sudden, complete or marked change in something. An apt descriptor to define what has transpired in the propane industry over the last five years is — Revolution. In that time span the United States became the global leader in propane exports, saw domestic demand shift to secondary status, and realized prolific growth in propane production. As with any revolution, two questions typically arise: will these changes continue and what will the impacts be? We have to look at several segments of the propane market in order to get complete answers. “Follow the money” may be the best path forward to understand if the propane export revolution will continue. The graph below highlights the narrow margin currently available on a monthly basis to move product from...

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  • Feature Articles

    Some Changes Taking Place in Market Fundamentals and Prices

    By JD Buss . . . More market volatility. We see that in both market fundamentals and in market prices. From the fundamental standpoint, the surge in export volume from the United States has now made our domestic market both heavily intertwined with, and susceptible to, other international conditions. A major view now is that exports will continue indefinitely. But a change in the demand in China, or a narrowing of prices in South America or another region, will generate decisions that could leave more—or less—propane within our domestic borders. Exports have already had a huge impact on propane prices. One impact has been a lengthening of the propane price curve. Price curves now go out to 2020, and it’s not unusual to hear quotes...

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  • Greatest Risk Now for Propane Retailers: Supply Complacency

    By JD Buss… An “outlier” can be defined as a value that “lies outside” most of the other values in a set of data. In 2008, Malcolm Gladwell published the book “Outliers” in an attempt to identify why some individuals have been extremely successful. In a separate question and answer section, he wrote that “we vastly underestimate the extent to which success happens because of things that the individual has nothing to do with.” Expanding Gladwell’s thought process, success also has a great deal to do with how individuals respond to circumstances they have nothing to do with. Looking at this coming winter, there are several risks propane retailers can’t control, but they can certainly be successful based on how they prepare and respond when...

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  • Over-Abundance Questions Value of Supply Security

    Over-accumulation,” explains Patrick Bond, a political economist and professor at South Africa’s University of KwaZulu-Natal, refers to a situation in which excessive investment has occurred. Hence, goods cannot be brought to market profitably — leaving capital to pile up in [sector] bottlenecks or speculative outlets without being put back into new productive investment. Other symptoms include idled plants and equipment, a glut of unsold commodities, an unusually large number of unemployed workers, and an inordinate rise of financial markets. Bond made his observations almost 17 years ago in an article titled, “What Is the Crisis of Over-Production?” The article’s examination echoed and followed, by more than 150 years, arguments put forth by revolutionary socialist and economist Karl Marx. Jumping forward, the British economist John Maynard Keynes in...

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