WSI Energycast Outlook Calls for Cool Spring in Northern US; Generally Warm South
WSI and ESAI issue an update of special interest to energy traders
Andover, MA, March 24, 2009 - WSI expects the upcoming three-month period (April-June) to average cooler than normal across much of the northern tier of the US along with parts of the Southeast, with above-normal temperatures across the south-central and southwestern US. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
The monthly breakdown follows:
In April:
- Northeast – Cooler than normal
- Southeast – Cooler than normal
- N Central – Cooler than normal
- S Central – Warmer than normal
- Northwest – Cooler than normal
- Southwest – Warmer than normal
Expected Market Impact (provided by ESAI)
The WSI April forecast indicates warmer-than-normal temperatures in the
South Central and Southwest regions, with cooler-than-normal temperatures
in other regions. In April, weather variations will have less impact on
electricity demand swings due to lower shoulder-season loads. Natural-gas
demand will be impacted by cooler weather in the eastern and northern
heating regions as incremental late season withdrawals could reduce inventories.
However, inventories are likely to finish at a high enough level that
late season withdrawals will have only minimal impacts on price. Natural-gas
demand should also move higher due to nuclear refueling shutdowns during
April and May as well as generator maintenance at coal plants. The increased
reliance on natural gas to fill the gap should add some marginal demand
to the regional gas market, and provide some weather-related support to
natural-gas prices. Weather-related demand for gas and electricity should
be slightly above normal in most regions except for Texas where temperatures
are expected to be well above normal in April.
In May:
- Northeast – Cooler than normal
- Southeast – Warmer than normal, except FL
- N Central – Cooler than normal
- S Central – Warmer than normal
- Northwest – Cooler than normal
- Southwest – Warmer than normal
Expected Market Impact (provided by ESAI)
The WSI May forecast continues to indicate cooler-than-normal temperatures in the northern tier of the country, and warmer-than-normal temperatures in the South Central and Southwest regions. Warmer temperatures in these regions should bring early cooling demand boosting electricity and natural-gas loads. In other regions, cooler weather expectations should preempt any early season heat expectations and electricity demand should be slightly below normal. Natural-gas demand in May will again be impacted more by nuclear and coal generator maintenance programs than by deviations in the weather due to the lower shoulder season electricity loads. Natural-gas injections to storage should be close to normal based on weather expectations, but injections could be higher than normal due to lower demand expectations because of poor economic conditions.
In June:
- Northeast – Warmer than normal
- Southeast – Cooler than normal
- N Central – Cooler than normal
- S Central – Warmer than normal
- Northwest – Cooler than normal
- Southwest – Warmer than normal
Expected Market Impact (provided by ESAI)
The WSI June forecast indicates warmer-than-normal temperatures in the
Northeast, South Central and Southwest regions. Warmer-than-normal temperatures
in the Northeast should be bullish for electricity demand and prices,
particularly in New York and PJM where even higher temperature expectations
result in a higher probability of early-season heat events. Cooler weather
in the Southeast region should result in slightly lower gas demand from
the power sector, offsetting higher demand expectations across the other
southern regions.
According to WSI seasonal forecaster Dr. Todd Crawford, “The general pattern of cold-north and warm-south observed during recent months will generally continue into late spring. The warmest temperatures, relative to normal, will continue to be in the south-central and southwestern states. The North Atlantic and North Pacific Oceans are now both cooler than normal for the first time in 15 years. This may mean a cooler summer than we’ve had in quite some time, particularly in the southern US if the drought breaks this spring. The current thinking is that much of the northern US will see near to slightly above-normal temperatures this summer.”
WSI, which provides customized weather information to energy traders, issues its seasonal outlook twice-monthly. The next new forecast package (for May-July, plus the first official summer (June-August) forecast) will be issued on April 14.
About WSI Corporation
WSI is the most trusted source of weather information across the globe. Top
insurance, risk management companies and financial institutions, worldwide,
trust WSI to supply them with easy-to-use, timely and expert weather guidance
to help anticipate market volatility, mitigate risk and make critical decisions
with confidence. 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. For more information,
please visit us on the web at www.wsi.com
or call us at 877.WSI.CORP or +44.121.233.7600.
About ESAI Corporation
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 visit
www.esai.com
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