WSI Energycast Outlook Calls for Cold Start, Warm Finish to Winter in the East
WSI and ESAI issue an update of special interest to energy traders
Andover, MA, November 20, 2007 — WSI Corporation issued the seasonal outlook for the upcoming three-month period (December-February) on November 13. WSI expects the upcoming winter to be colder-than-normal from the Pacific Northwest to the Great Lakes, with warmer-than-normal temperatures elsewhere. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
The monthly breakdown follows:
In December:
- Northeast – Colder than normal
- Southeast – Colder than normal, except FL
- N Central – Colder than normal
- S Central – Warmer than normal
- Northwest – Warmer than normal, except MT/ID/WY
- Southwest – Warmer than normal
Expected Market Impact (provided by ESAI)
The WSI December forecast indicates colder-than-normal temperatures across the northern and eastern regions of the country, particularly in the North Central region. Record-high natural gas inventories at the start of the heating season in mid-November should moderate a bullish outlook for gas prices in December. Warmer temperatures in the Gulf Coast and Southwest regions should temper overall demand slightly. Power prices are likely to be influenced more by gas price increases than through increased load induced by cold weather.
In January:
- Northeast – Warmer than normal
- Southeast – Warmer than normal
- N Central – Warmer than normal, except ND
- S Central – Warmer than normal
- Northwest – Colder than normal
- Southwest – Warmer than normal, except CA/NV
Expected Market Impact (provided by ESAI)
The WSI January forecast indicates warmer-than-normal temperatures in the Northeast and significantly warmer-than-normal in the Southeast. Warmer temperatures in January would tend to decrease the chances for extended cold snaps which would provide price volatility in natural gas, however, the La Nina event could bring occasional shorter periods of very cold weather. Warmer temperatures across most of the country should result in below-normal natural gas demand. The colder outlook on the west coast will increase natural gas demand however, not enough to offset the lower demand from other regions.
In February:
- Northeast – Warmer than normal
- Southeast – Warmer than normal
- N Central – Colder than normal
- S Central – Colder than normal
- 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.
According to WSI seasonal forecaster Dr. Todd Crawford, “The strong La Nina event has been in control of the prevailing weather pattern since late summer, with warm temperatures in the East sharply transitioning to cooler temperatures in November. It appears that this cold weather in the East will persist through much of December, before an abrupt transition to much warmer conditions for most of the rest of the January-February period. Many of the climate-monitoring indices are at record or near-record levels going into this winter, which suggests that we may see extremes in both the early cold pattern and the late warm pattern this winter.”
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 November 29, with the next new forecast package (for January-March) issued on December 18.
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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