WSI (Weather Services International) expects the upcoming period (February-April) to average colder than normal across most of the northern and western US, with above-normal temperatures confined to the south-central and southeastern states. The WSI seasonal outlooks now reference a standard 30-year normal (1981-2010).
?So far, the heating season has been the mildest since 2006-07 across the major energy demand centers of the US, as a very strong polar vortex has kept most of the significant and sustained cold out of the eastern US. This regime has now ended as the polar vortex has weakened significantly. For this reason, the last half of winter and early spring will likely be much different than the first half of winter. Further, the first significant episode of North Atlantic blocking (negative NAO pattern) is expected to develop as we head into February, allowing for more widespread, below-normal temperatures in the US,? said WSI Chief Meteorologist Dr. Todd Crawford. ?While the current moderate La Nina event has already begun to wane and hasn?t yet produced the expected impacts on US weather patterns so far this winter, we still think that the weaker polar vortex will allow for more typical, late-winter, La Nina impacts to manifest going forward. Specifically, this favors below-normal temperatures across the northern and western US and above-normal temperatures across the Southeast. For the February-April aggregate period, we think that below-normal temperatures will occur north of a Phoenix-Washington DC line. In total, our forecast calls for a 2.4% reduction in heating demand relative to last winter, but a 5.2% increase relative to the 1981-2010 averages.?
In February, WSI sees the monthly breakdown as:
Northeast* ? Colder than normal
Southeast * ? Warmer than normal
N Central* ? Colder than normal
S Central* ? Warmer than normal
Northwest* ? Colder than normal
Southwest* ? Warmer than normal, except southern California
According to Paul Flemming, Director at ESAI, ?The northern tier regions are expected to be colder than normal in February, particularly in the Pacific Northwest. Although colder temperatures across the northern part of the country will increase gas demand, any price response will be tepid due to high inventories and continued high production. Power prices in the Northeast will be low as a result of lower gas prices. Increased loads in February are possible due to the higher likelihood of cold snaps. This outcome would be bullish for delivered gas prices and power prices in the Northeast and Midwest markets. Warmer weather in Texas will be slightly bearish for loads and power prices there.?
In March, WSI forecasts:
Northeast ? Colder than normal
Southeast ? Warmer than normal
N Central ????? Colder than normal
S Central ????? Warmer than normal
Northwest ? Colder than normal
Southwest ? Warmer than normal
?Temperatures in March are expected to be much-colder-than-normal across the northern tier of the country. Although gas prices are expected to remain low, power prices could rally at times. These rallies would be due to the higher loads associated with late-winter cold combined with an early start to the generator-maintenance-season this year. There are planned nuclear outages in March in both PJM and New York,? Flemming noted. ?Warmer weather across the southern states should be neutral for power prices in Texas and Florida with shoulder-period load levels in those regions.?
In April, WSI forecasts:
Northeast ? Warmer than normal
Southeast ? Warmer than normal
N Central ????? Colder than normal
S Central ????? Warmer than normal, except west Texas
Northwest ? Colder than normal
Southwest ? Colder than normal
?Warmer-than-normal temperatures across the eastern states will have little impact on power prices due to low seasonal loads. As April and May are the peak months for generator maintenance in most regions, power prices will be moderate and be more bullishly influenced by planned generator maintenance outages than by warmer-than-normal temperatures. Lower gas-demand for heating in April will be offset, somewhat, by the increased need for gas from the power sector, as gas plants make up for coal and nuclear outages,? Flemming added. ?Colder-than-normal temperatures in the western states should only have minor impacts on power prices.?
WSI, which provides customized weather information to energy traders, will issue its next seasonal outlook on February 21.
*To view the map defining WSI?s US regions, click here.
About WSI
WSI (Weather Services International) is the world's leading provider of weather-driven business solutions for professionals in the energy, aviation and media markets and multiple federal and state government agencies. WSI is a member of The Weather Channel Companies and is headquartered in Andover, Massachusetts with offices in Birmingham, England. The Weather Channel Companies are owned by a consortium made up of NBC Universal and the private equity firms The Blackstone Group and Bain Capital. More information about WSI can be found at http://www.wsi.com.
About ESAI
Since its inception in 1984, Energy Security Analysis Inc. (ESAI) has been dedicated to monitoring, analyzing and synthesizing information about world-wide energy markets. Tapping the talents of its senior-level staff, ESAI provides clients with unparalleled insight into where the markets have been and where they are headed. ESAI provides ongoing systematic analysis of energy prices in the oil, natural gas and energy markets. For more information on ESAI services, see http://www.esai.com.
Contacts:
Linda Maynard????
WSI
(978) 983-6715????
lmaynard(at)wsi(dot)com
Tommy Sutro
Energy Security Analysis, Inc.
(781) 245-2036
tsutro(at)esai(dot)com
Editorial Contact:
Barbara Rudolph????
Rudolph Communications, LLC
(781) 229-1811
bjr(at)rudolphcommunications(dot)com
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