Technically, it has been spring for more than a week now. However, on Sunday, I was trying out snow-shoeing in Mendon Ponds Park crossing over 6 inches of brand new snow -- it doesn’t feel like spring.
The weather is usually considered the quintessence of small talk, just meaningless filler. This winter, the weather has been fraught with meaning. One brutally cold and protracted winter has a chilling effect on the economy. Cold weather keeps consumers at home, slowing big ticket purchases (like housing and autos), and small item discretionary spending (sit down restaurants).
The cold winter has a pronounced effect on the energy sector. Despite an energy glut, the current price (i.e. the spot price) for natural gas is high. Meanwhile, the long term fundamentally supported price, suggested by the futures market, suggest the US will have no problem meeting future energy requirements.
Furthermore, the energy sector exhibits direct links to geopolitics, which most certainly affected Q1 2014 performance. Russia has flexed its muscles in the Crimean peninsula without much impact of sanctions or intervention due to EU dependence on Russian natural gas. However, the near term demand for Russian energy is about to drop as winter comes to a close. Will the European Union look to the US to replace their energy supply? The projections suggest that North American oil and gas can easily supply the EU if the infrastructure for transporting natural gas is improved. If the US begins exporting oil and natural gas to Western Europe for energy, will resource-rich, but institutionally-immature nations (like Russia or Venezuela) be able to ignore international censure so easily?
I’m looking forward to a reset in the physical environment for all the normal reasons. I’m more comfortable when it’s warmer and I look forward to seeing some new growth. I’m also looking forward to spring because it can lead to a refresh of perspective and an improvement in economic possibilities.