WSI Anticipates Another Cold Late Fall & Early Winter in the Eastern US

Increasing Chances of Below-Normal Temperatures in Eastern and Central US by November/December

Andover, MA, September 20, 2011 — WSI (Weather Services International) expects the upcoming fall period (October-December) to average cooler than normal in all of the northern and eastern US, with above-normal temperatures confined to the southwestern US. The WSI seasonal outlooks now reference a standard 30-year normal (1981-2010).

“The primary ocean signals suggest the late fall and early winter period will resemble those of the last three years, with an early start to winter in the eastern US. While October should be relatively mild across much of the US, below-normal temperatures will become more common in the eastern US in November and across all of the northern US by December,” said WSI Chief Meteorologist Dr. Todd Crawford. “The combination of the newly-emerging La Nina event and the continued trend towards North Atlantic atmospheric blocking support both support this hypothesis.”

In October, WSI sees the monthly breakdown as:

Northeast* – Warmer than normal
Southeast * – Cooler than normal
N Central* – Warmer than normal
S Central* – Warmer than normal
Northwest* – Cooler than normal
Southwest* – Warmer than normal, except coastal CA

According to Paul Flemming, Director of Power and Gas Services at ESAI, “October is a shoulder month for electricity demand. However, generator maintenance during October results in a lower availability of coal and nuclear plant capacity. This gap is filled by gas-fired generators and tends to increase the relative gas demand for power, despite lower overall demand for power. With warmer-than-normal temperatures expected in ERCOT, MISO, PJM, New York and New England during October, above-normal seasonal power demand early in the month and the continuation of the generation maintenance period should keep gas demand firm and gas prices from collapsing as the injection season nears its end. Implied market heat rates in the power markets are likely to remain relatively firm in those regions due to the marginal, late-season cooling demand and ongoing maintenance outages. Due to slightly higher demand in October, we expect gas inventory levels to have trouble challenging last year’s record of 3,840 Bcf by the end of the injection season. Our current end-of-season storage forecast currently stands at 3,650 Bcf.”

In November, WSI forecasts:

Northeast – Colder than normal, except ME
Southeast – Colder than normal
N Central – Warmer than normal
S Central – Warmer than normal
Northwest – Warmer than normal
Southwest – Warmer than normal

Flemming further noted, “In November, heating demand begins to pick up in the Consuming East (i.e. Northeast, Mid-Atlantic, and Midwest). Lower early-season gas demand, due to warmer-than-normal temperatures in the North Central and Northwest regions, will be offset by colder-than-normal temperatures in the Northeast; and heating demand for gas will likely run slightly below normal. Henry Hub natural gas prices can be expected to pick up slightly from October shoulder season levels as early-winter heating demand begins. Gas inventory levels at the start of the withdrawal season should be slightly lower than last year. Power prices in the Northeast will be supported by cooler temperatures, as well as continued generator maintenance.”

In December, WSI forecasts:

Northeast – Colder than normal
Southeast – Colder than normal, except FL
N Central – Colder than normal
S Central – Colder than normal, except TX
Northwest – Colder than normal
Southwest – Warmer than normal

Flemming added, “In December, much-colder-than-normal temperatures across the northern tier of the U.S. will result in much higher heating demand for gas. Typically, early-season cold weather indications are bullish for gas prices, as a long-term cold stretch starting in December could significantly reduce gas inventories. Power prices in the Northeast markets will be supported by colder weather, but warmer-than-normal temperatures in Texas and Florida will moderate power prices in those markets.”

WSI, which provides customized weather information to energy traders, will issue its next seasonal outlook, including the first official forecast for winter (December-February) on October 25.

*To view the map defining WSI’s US regions, click here.

About WSI
WSI (Weather Services International) 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 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.

About ESAI
Since its inception in 1984, Energy Security Analysis Inc. (ESAI) has been dedicated to monitoring, analyzing and synthesizing information about worldwide 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, see www.esai.com.

Contacts:
Linda Maynard
WSI
(978) 983-6715
lmaynard@wsi.com

Tommy Sutro
Energy Security Analysis, Inc.
(781) 245-2036
tsutro@esai.com

Editorial Contact:
Barbara Rudolph
Rudolph Communications, LLC
(781) 229-1811
bjr@rudolphcommunications.com