WSI Energycast Outlook Calls for Transition to Above-Normal Temperatures in June in Eastern US; Hot Summer in Northern Plains, Cool Summer Southeast
WSI and ESAI issue an update of special interest to energy traders
Andover, MA, May 27, 2008 — WSI Corporation issued the seasonal outlook for the upcoming three-month period (June-August) on May 20. WSI expects the upcoming three-month period to average cooler than normal in the Southeast and Pacific Coast states, with warmer-than-normal temperatures elsewhere, especially in the northern Rockies and northern Plains. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
The monthly breakdown follows:
In June:
- Northeast – Warmer than normal
- Southeast – Warmer than normal
- N Central – Cooler than normal
- S Central – Cooler than normal, except TX
- Northwest – Cooler than normal
- Southwest – Cooler than normal
Expected Market Impact (provided by ESAI)
The WSI June forecast indicates cooler-than-normal temperatures in most regions but warmer-than-normal temperatures along the Eastern Seaboard (from Maine to Florida) and across the Gulf Coast. Higher natural-gas demand from the power sector for cooling from these regions will be offset by lower-than-normal demand expected throughout the central and western regions of the U.S. Power prices and are expected to be moderately firm in the Eastern and Gulf Coast regions due to warmer weather and continued high gas prices. Softer-than-normal loads in the West will combine with a normal Northwest hydro season to moderate WECC power prices.
In July:
- Northeast – Cooler than normal
- Southeast – Cooler than normal
- N Central – Much warmer than normal
- S Central – Warmer than normal
- Northwest – Warmer than normal, except coastal locations
- Southwests – Warmer than normal, except CA coastal locations
Expected Market Impact (provided by
ESAI)
The WSI July forecast indicates a much warmer-than-normal temperature outlook for the North Central region, while California and the Eastern Seaboard are expected to be cooler than normal. Warmer-than-normal temperatures are expected to extend to the South Central and Southwest. Gas injections to storage in July may be slightly below-normal with higher demand in the Central regions offset by cooler weather in the highly populated Eastern and Western coastal regions. Power prices are likely to be moderate in the Northeast and California markets with a lower probability of heat events during July in these areas.
In August:
- Northeast – Warmer than normal
- Southeast – Cooler than normal
- N Central – Warmer than normal
- S Central – Warmer than normal
- Northwest – Warmer than normal, except coastal cities
- Southwest – Warmer than normal, except CA coastal locations
Expected Market Impact (provided by
ESAI)
The WSI August forecast indicates warmer-than-normal temperatures throughout most of the U.S. with cooler temperatures in the Southeast and California. Injections to gas storage are likely to be below-normal during August, providing a bullish factor in natural gas pricing. Power prices in the Northeast markets will be firm with slightly warmer-than-normal temperatures and a slightly higher probability of heat events. With normal-to-cooler temperatures expected in California and Texas, power prices should remain moderate in relation to prevailing natural gas prices.
According to WSI seasonal forecaster Dr. Todd Crawford, “A significant transition from cool May temperatures to significantly warmer June temperatures is expected across the eastern US, while much of the western half of the US remains cool. By July, we expect the most significant heat to emerge in the northern Plains, while July and August will be fairly close to normal in the major northeastern cities. A cool summer is expected in the Southeast, consistent with the very strong northern Pacific ocean temperature signal that is currently occurring.”
WSI, which provides customized weather information to energy traders, issues its seasonal outlook twice-monthly. An update to the current forecast will be issued to clients on May 29, with the next new forecast package (for July-September) issued on June 24.
About WSI Corporation
WSI Corporation 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 headquartered in Andover, Massachusetts
with offices in Birmingham, England, and is a wholly owned subsidiary of Landmark
Communications. More information about WSI can be found at www.wsi.com.
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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