WSI Energycast Outlook Calls for Cool May followed by Warm June in Northeast; Warm Summer Northern US, Especially Northern Plains
WSI and ESAI issue an update of special interest to energy traders
Andover, MA, April 22, 2008 - WSI Corporation issued the seasonal outlook for the upcoming three-month period (May-July) on April 15, along with a first official look at the upcoming summer (June-August). WSI expects the upcoming three-month period to average cooler than normal in the Southeast and Pacific Coast states, with warmer-than-normal temperatures elsewhere, especially in the Southwest. For the upcoming summer, early indications are that above-normal temperatures will be dominant from the southwestern US across to the Northeast, with near to slightly below-normal temperatures in the Southeast and Pacific Coast states. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
The monthly breakdown follows:
In May:
- Northeast - Cooler than normal
- Southeast - Cooler than normal, except FL
- N Central - Warmer than normal, except MN/ND
- S Central - Warmer than normal
- Northwest - Cooler than normal
- Southwest - Warmer than normal, except CA
Expected Market Impact (provided by ESAI)
The WSI May forecast indicates warmer-than-normal temperatures across
the southwestern portion of the country, where cooling demand is most
prominent. These warmer temperatures earlier in the month (when there
is still some lingering generator maintenance), is expected to keep natural
gas demand firm at Henry Hub. The cooler-than-normal temperatures in the
Ohio River valley and the Consuming East will extend heating degree-days
into May, and will also provide a firm price environment for natural gas.
Electrical loads in the Northeast will likely be softer-than-normal and
provide for some power price and implied market heat rate stability in
the region; particularly as generation returns to service (from south
to north) and as the month progresses.
In June:
- Northeast - Warmer than normal
- Southeast - Warmer than normal, except AL/MS
- N Central - Cooler than normal
- S Central - Cooler than normal, except TX
- Northwest - Cooler than normal
- Southwest - Warmer than normal, except CA
Expected Market Impact (provided by
ESAI)
The WSI June forecast indicates warmer-than-normal temperatures in the
Southeast and along the Eastern Seaboard (from Maine to Florida). This
presents a mixed picture for natural gas demand as the higher-than-normal
cooling demand from these regions will be offset by the lower-than-normal
demand expected throughout the central portion of the U.S. and along the
West Coast. Power prices, implied market heat rates, and congestion pricing
are expected to be firm in New York and New England due to the higher-than-normal
cooling demand and electrical loads. Softer-than-normal loads in California
will combine with a normal Northwest hydro season to pressure Cal-ISO
power prices and implied market heat rates.
In July:
- Northeast - Cooler than normal
- Southeast - Cooler than normal
- N Central - Warmer than normal, especially ND/MN
- S Central - Warmer than normal
- Northwest - Warmer than normal, except coastal WA/OR
- Southwest - Warmer than normal, except coastal CA
Expected Market Impact (provided by
ESAI)
The WSI July forecast indicates warmer-than-normal temperatures throughout
a large portion of the central U.S., while California and Eastern Seaboard
are expected to be cooler-than-normal. With such a large portion of the
country covered in warmer-than-normal weather, gas in storage beginning
the injection season at a 350 Bcf deficit to last year, and LNG expected
to only trickle in, spot natural gas prices will likely be firm in July.
Implied market heat rates and congestion pricing in New York, New England,
and the Mid-Atlantic Region are likely to be softer and more stable than
otherwise during this period, however. The same can be said for California,
where the cooler-than-normal temperatures will continue to linger, and
will have endured throughout most of the entire 90-day forecast period.
According to WSI seasonal forecaster Dr. Todd Crawford, “The impacts of the ongoing La Nina event, combined with the relatively high soil moisture levels, will likely result in a cool May in much of the eastern half of the US, followed by a warm June, especially in the Northeast. The remainder of the summer appears relatively mild in the East, with below-normal temperatures most prevalent in the Southeast. The most significant heat in July and August will emerge from the Rockies across to the Great Lakes.”
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 April 30, with the next new forecast package (for June-August) issued on May 20.
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
Print Page