WSI Energycast Outlook Calls for Warmer-than-Normal Temperatures in the East in January and February
WSI and ESAI issue an update of special interest to energy traders
Andover, MA, December 27, 2007 — WSI Corporation issued the seasonal outlook for the upcoming three-month period (January-March) on December 18. WSI expects the upcoming three-month period to be colder than normal north and west of a line from Phoenix to Boston, with warmer-than-normal temperatures elsewhere. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
The monthly breakdown follows:
In January:
- Northeast – Warmer than normal
- Southeast – Warmer than normal, except FL
- N Central – Warmer than normal, except ND
- S Central – Warmer than normal
- Northwest – Colder than normal, except MT/ID/WY
- Southwest – Warmer than normal, except southern CA
Expected Market Impact (provided by ESAI)
The WSI January forecast indicates warmer-than-normal temperatures across most of the country, except in the Northwest. Early cold in December has provided a slight offset to record-high natural gas inventories at the start of the heating season. However, the warmer than normal outlook for January tempers the bullish impacts of the early season gas demand due to the December cold weather. Much warmer temperatures in the Gulf Coast and Southeast regions should also be slightly bearish for overall gas demand.
In February:
- Northeast – Warmer than normal
- Southeast – Warmer than normal
- 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 indicates much warmer-than-normal temperatures along the eastern seaboard. Colder temperatures are expected in all other regions, particularly in the Midwest and North Central regions. Increases in natural gas demand in central and western regions should be offset by much warmer temperatures in the East. With high inventories at the start of the heating season and generally warmer temperatures in January, the outlook for natural gas prices is neutral to slightly bearish in February.
In March:
- Northeast – Colder than normal
- Southeast – Colder than normal, except MS
- N Central – Colder than normal
- S Central – Colder than normal, except TX/LA
- Northwest – Colder than normal
- Southwest – Colder than normal, except NM
Expected Market Impact (provided by ESAI)
The WSI March forecast indicates much colder-than-normal temperatures in all regions, with much colder than normal temperatures 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 be more than adequate to meet late-season high demand due to the expectation of well above-normal inventories by end February. 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.
According to WSI seasonal forecaster Dr. Todd Crawford, “The strong La Nina event has generally been in control of the prevailing weather pattern since late summer, with warm fall temperatures in the East transitioning sharply to cooler temperatures in November and most of December. It appears that a transition back to milder conditions has recently occurred, which will likely result in warmer-than-normal temperatures for a good part of January and February in much of the East. The bulk of the cold weather should now become centered from the Pacific Northwest into the north-central US for the next couple of months as the East recovers from a very cold early December.”
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 December 31, with the next new forecast package (for February-April) issued on January 15
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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