WSI Energycast Outlook Calls for Above-Normal Temperatures in the Northeast in February, Below-Normal in March and April
WSI and ESAI issue an update of special interest to energy traders
Andover, MA, January 22, 2008 — WSI Corporation issued the seasonal outlook for the upcoming three-month period (February-April) on January 15. WSI expects the upcoming three-month period to be colder than normal north and west of a line from El Paso to New York City, with warmer-than-normal temperatures elsewhere. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
The monthly breakdown follows:
In February:
- Northeast – Warmer than normal
- Southeast – Warmer than normal, except FL
- N Central – Colder than normal
- S Central – Colder than normal, except AR/LA
- Northwest – Colder than normal
- Southwest – Colder than normal
Expected Market Impact (provided by ESAI)
The WSI February forecast continues to call for warmer-than-normal temperatures along the eastern seaboard. Colder temperatures are expected in most other regions, particularly in the Midwest and Northern regions. Increases in natural gas demand in central and western regions should be offset by mild temperatures in the East. With above-average inventories and generally warmer temperatures expected for February, the outlook for natural gas prices is neutral.
In March:
- Northeast – Colder than normal
- Southeast – Warmer than normal
- N Central – Colder than normal
- S Central – Warmer than normal
- Northwest – Colder than normal
- Southwest – Colder than normal, except NM
Expected Market Impact (provided by ESAI)
The WSI March forecast indicates colder-than-normal temperatures across most of the country, especially across the northern tier. A cold March will create above-normal demand for natural gas and may offset lower-than-normal gas inventory withdrawals during January and February. However, inventories should end the season with supplies that are well above average. Cold weather in March will be supportive for gas prices but may not be overly bullish with the end of the heating season close at hand. Lower temperatures will drive electric loads higher than normal in most regions, but prices should be moderate due to the outlook for steady gas prices near current levels. Prices will also be influenced in many regions by the start of the maintenance season and nuclear refueling outages.
In April:
- Northeast – Colder than normal
- Southeast – Warmer than normal
- N Central – Warmer than normal
- S Central – Warmer than normal
- Northwest – Colder than normal
- Southwest – Colder than normal, except NM
Expected Market Impact (provided by ESAI)
The WSI April forecast indicates warmer-than-normal temperatures in the Central and Southeast regions with cooler-than-normal temperatures in the Northeast and in parts of the West. Slightly lower natural gas demand would be expected during the last two to three weeks of the heating season; seasonal demand is lower and the impact on supply and market price is diminished. In April, electric loads will reflect shoulder season demand and prices will be influenced less by temperature fluctuations than by planned maintenance schedules.
According to WSI seasonal forecaster Dr. Todd Crawford, “The impacts of the ongoing La Nina event will continue to result in plenty of Arctic air in Canada and the western and central US in February. In the East, the current cold spell should wane during at least the first half of February, allowing for a return to above-normal temperatures. The above-normal temperatures won’t last particularly long in the Northeast, however, as we expect both March and April to be cooler-than-normal.”
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 January 31, with the next new forecast package (for March-May) issued on February 19.
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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