WSI Energycast Outlook Calls for Transition to Colder than Normal Temperatures in the East as Fall Progresses
WSI and ESAI issue an update of special interest to energy traders
Andover, MA, September 26, 2007 - WSI Corporation issued the seasonal outlook for the upcoming three-month period (October-December) on September 18. WSI expects the upcoming three-month period to average warmer than normal in all locations except for the northwestern quarter of the country. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
The monthly breakdown follows:
In October:
- Northeast - Colder than normal
- Southeast - Warmer than normal
- N Central - Colder than normal, except IA/NEl
- S Central - Warmer than normal, especially TX
- Northwest - Warmer than normal, except MT
- Southwest - Warmer than normal
Expected Market Impact (provided by ESAI)
The WSI October forecast indicates colder-than-normal temperatures across
the Northeast and North Central regions. Warmer temperatures prevail in
the rest of the country. Heating demand for gas may be slightly above-average
from the colder regions, but not enough to offset continued gas injections
to storage. Shoulder-season power demand will be moderate but prices may
be volatile in areas with high levels of scheduled generator maintenance.
In the Northeast, fall generator maintenance programs are low and there
are no scheduled nuclear outages in New York or New England. With moderate
temperatures and low nuclear outages, gas demand from the power sector
in the Northeast will be moderate.
In November:
- Northeast - Warmer than normal
- Southeast - Warmer than normal
- N Central - Colder than normal
- S Central - Colder than normal
- Northwest - Colder than normal
- Southwest - Warmer than normal
Expected Market Impact (provided by
ESAI)
The WSI November forecast indicates colder-than-normal temperatures across
the North Central and Northwest regions. Early heating demand for gas
from these regions should be offset by warmer temperatures elsewhere in
the country, particularly the Northeast. Power demand will be moderate
due to shoulder-season temperatures. Early cold weather in November could
ease pressure on growing natural gas inventories.
In December:
- Northeast - Colder than normal
- Southeast - Colder than normal
- N Central - Colder than normal
- S Central - Warmer than normal
- Northwest -Colder than normal, except MT
- Southwest - Warmer than normal, especially AZ/NM
Effects in the Marketplace (provided
by ESAI)
The WSI December forecast indicates colder-than-normal temperatures across
the Northern and Eastern regions of the country. Cold weather across all
of the key heating demand areas in December should be bullish for gas
prices, however, supply concerns are likely to moderated by high natural
gas inventories at the start of the heating season in mid-November. Power
prices are likely to be influenced more by gas price increases than through
increased load induced by cold weather.
According to WSI seasonal forecaster Dr. Todd Crawford, “The La Nina event continues to slowly strengthen and play a dominant role in temperature patterns, primarily via modulation of tropical convection patterns and their subsequent downstream impacts in the US. Typically, in the eastern US, La Nina means a warm October and a cold December, with the transition occurring in November. While we feel that December will indeed be cold in the East, the current ocean temperature patterns in the northern Pacific suggest that the early fall warmth may not be as certain as the La Nina signal suggests.”
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 September 27, with the next new forecast package (for November-January) issued on October 16.
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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