WSI Energycast Outlook Calls for Warm Summer in most of Eastern US

The monthly breakdown follows:
In June:

• Northeast – Warmer-than-normal
• Southeast – Warmer-than-normal inland, cool along coast
• N Central – Warmer-than-normal
• S Central – Warmer-than-normal inland, cool along coast
• Northwest – Cooler-than-normal
• Southwest – Warmer-than-normal

Effects in the Marketplace
WSI’s forecast indicates warmer-than-normal temperatures in June for most regions with the exception of the Northwest. This is bullish for power prices in most regions. More importantly, a warm start to the summer throughout the US will provide uncertainty to natural gas injections to storage and will be supportive for gas prices.

In July:

• Northeast – Warmer-than-normal, especially NY/PA/NJ
• Southeast – Warmer-than-normal
• N Central – Warmer-than-normal, especially MN/ND/WI/IL/IN/OH
• S Central – Warmer-than-normal
• Northwest – Cooler-than-normal, except for MT
• Southwest – Warmer-than-normal

Effects in the Marketplace
WSI’s forecast indicates warmer-than-normal temperatures in July throughout the US with the exception of the Northwest. The warmer-than-normal forecasts increase the likelihood of heat events in July that would have bullish impacts on power and gas prices.

In August:

• Northeast – Warmer-than-normal
• Southeast – Warmer-than-normal, especially SC/NC/VA
• N Central – Warmer-than-normal
• S Central – Cooler-than-normal inland, except for OK/KS
• Northwest – Warmer-than-normal
• Southwest – Warmer-than-normal

Effects in the Marketplace
WSI’s forecast for August also indicates warmer-than-normal temperatures in most regions with the exception of the South Central region. As the warmer-than-normal outlook extends past July and into August, the increased chances of additional heat events is bullish not only from a power demand viewpoint, but also because extended heat increases the likelihood of generator outages.
According to WSI seasonal forecaster Dr. Todd Crawford, “We expect a pretty warm summer this year in the East, especially during the last half of the summer and in the Great Lakes and Ohio Valley.”

WSI successfully predicted (1) the unusually cold January 2004 in much of the eastern US, (2) a cool 2003 summer in the Southeast and mid-Atlantic, and (3) a cold ‘02-‘03 winter in the Southeast. Their three-month seasonal forecasts have been skillful for 7 out of the last 12 periods. A skillful seasonal forecast is defined as one that is closer to what is actually observed than a forecast using the 30-year average temperature.

WSI, which provides customized weather information to energy traders, issues its Seasonal Outlook twice monthly. The next forecast update for June-August will be issued on May 27, with the next new forecast package (for July-September) issued to clients on June 15 and to the press on June 22.

About WSI
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.wsienergycast.com.

About ESAI
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, see www.esai.com.