WSI Calls for Cool Summer in Southeast, Slightly Warmer-than-Normal in Northeast
WSI and ESAI Provide Analysis of Weather and Market Trends for Energy Traders
Andover, MA, April 22, 2009 — WSI expects the upcoming three-month period (May-July) to average cooler than normal across parts of the Southeast and north-central US, with above-normal temperatures common across the Northeast and Southwest. WSI also expects the summer period (June-August) to be cool across the Southeast, mid-Atlantic, Ohio Valley, and southern and central Plains, with above-normal temperatures confined to the Rockies and Northeast. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
“We expect most of the significant and prolonged
heat this summer to be confined to drought-plagued areas of the western
US,” said WSI seasonal forecaster Dr. Todd Crawford. “Our
internal forecast models all suggest that the coolest temperatures, relative
to normal, will be found in the Southeast this summer, with near to slightly
above-normal temperatures in the Northeast. The North Atlantic and North
Pacific Oceans are now both cooler than normal for the first time in 15
years. This fact, along with a lack of any significant drought conditions
in the eastern US, should result in a relatively cool summer east of the
Rockies. We do think that there is potential for some notable heat in
the Northeast early in the summer, before a cooler pattern sets in.”
In May, WSI predicts regional temperature anomalies as follows:
Northeast – Cooler than normal
Southeast – Warmer than normal, except FL
N Central – Cooler than normal
S Central – Warmer than normal
Northwest – Cooler than normal
Southwest – Warmer than normal, except coastal CA
According to Paul Flemming, ESAI’s Director of Power and Gas, “The
WSI May forecast indicates cooler-than-normal temperatures in the northern
tier of the country. In May, shoulder season loads normally apply, but
early-season heat can increase electricity demand significantly. The cooler
outlook for the northern regions will lower the likelihood of early-season
heat-related demand for electricity and power sector gas demand.”
ESAI further estimates that natural gas demand in May will again
be influenced by higher gas plant utilization due to nuclear and coal
generator maintenance programs and weather deviations will be less important
due to shoulder season electricity loads. Though natural-gas injections
to storage should be close to normal based on weather expectations, injections
could be higher than normal due to lower economy-related demand expectations.
In June, WSI predicts regional temperature anomalies as follows:
Northeast – Warmer than normal
Southeast – Cooler than normal
N Central – Cooler than normal
S Central – Warmer than normal
Northwest – Cooler than normal
Southwest – Warmer than normal, except coastal CA
“The WSI June forecast indicates warmer-than-normal temperatures in the Northeast, South Central and Southwest regions,” said Paul Flemming of ESAI. “Warmer-than-normal temperatures in the Northeast are indicative of a higher probability of early-season heat events that are bullish for electricity demand and prices, particularly in New York and PJM. Cooler weather in the Southeast region should result in slightly lower gas demand from the power sector, partly offsetting higher demand expectations across the other southern regions.”
In July WSI forecasts:
Northeast – Warmer than normal
Southeast – Cooler than normal
N Central – Cooler than normal, except ND
S Central – Cooler than normal
Northwest – Warmer than normal
Southwest – Warmer than normal, except coastal CA
“The WSI July forecast indicates warmer-than-normal temperatures in the western regions, but cooler temperatures in South Central and Southeast regions,” said Paul Flemming of ESAI. “Warmer-than-normal temperatures in the Northeast will drive electricity loads higher and will be bullish for electricity demand and prices, especially with a higher likelihood of heat events. Cooler weather in the Southeast and central regions should result in slightly lower gas demand from the power sector, offsetting higher demand expectations in the west and in the Northeast.”
WSI, which provides customized weather information to
energy traders, issues its seasonal outlook twice-monthly. The next new
forecast package (for the June-August and July-September periods) will
be issued on May 27.
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