WSI Calls for Cold Period in Southeast, Most of Central US During October-December Period

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WSI and ESAI Say Near-Normal Fall Temperatures in Key Demand Areas Will Temper Bullishness in Natural Gas Prices

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A moderate El Nino event will likely persist through the winter, resulting in cool weather across the Southeast

WSI expects the upcoming period (October-December) to average cooler than normal in the southeastern and central US, with above-normal temperatures common across the Northeast and Southwest. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).

"A moderate El Nino event will likely persist through the winter, resulting in cool weather across the Southeast" said WSI seasonal forecaster Dr. Todd Crawford. "However, ocean temperatures in the North Pacific are not currently supportive of a typical El Nino pattern this upcoming winter. If this persists, this winter will likely be colder in the western US than is typical during El Nino events. In the Northeast, we expect a relatively mild fall, with increased chances of sharply colder weather after the New Year. The combination of various climate indices suggests that the winter will likely arrive late but loudly in much of the East, and that a mild start will not necessarily persist through the winter."

In October, WSI predicts regional temperature anomalies as follows:
Northeast     - Warmer than normal
Southeast     - Colder than normal
N Central     - Colder than normal
S Central     - Colder than normal
Northwest     - Colder than normal
Southwest     - Warmer than normal

According to Paul Flemming of ESAI, "The WSI October forecast indicates warmer-than-normal temperatures in the Northeast and colder-than-normal temperatures in most of the rest of the country, particularly the North Central region. Early season cold in October may prompt mild heating demand in the North Central region, but warmer temperatures in the Northeast population centers may offset this. Cooler weather will not be enough to offset expectations of an early fill of natural gas inventories. If the hurricane season remains benign, natural gas storage inventories are expected to break the previous inventory record in October. We expect cash prices at Henry Hub to trade below $3.00 for a large portion of the month forcing some production shut-ins. In the power markets, generator maintenance should overshadow weather variations in October."

In November, WSI sees the monthly breakdown as:
Northeast     - Colder than normal
Southeast     - Colder than normal
N Central     - Colder than normal
S Central     - Colder than normal
Northwest     - Warmer than normal
Southwest     - Warmer than normal

"The WSI November forecast indicates that cooler-than-normal temperatures will cover all of the consuming East with warmer temperatures in the West. The cooler outlook as we enter the heating season will boost natural gas demand and could trigger an early start to inventory withdrawals. In the power markets, generator maintenance will continue into November and will exert more influence on prices than nominally cooler temperatures in the November shoulder month. November should be moderately bullish for gas, although record high inventories will weigh on the market," noted Paul Flemming.

In December, WSI forecasts:
Northeast     - Warmer than normal
Southeast     - Colder than normal
N Central     - Warmer than normal
S Central     - Colder than normal
Northwest     - Colder than normal
Southwest     - Colder than normal

"The WSI December forecast indicates that the warmer-than-normal temperatures will prevail across the northern tier of the country. This warmer weather in the key heating markets will be disappointing for natural gas demand. Lower demand in early winter combined with high inventories will be very bearish for prices. Cooler-than-normal weather in the rest of the country will not likely provide a demand offset to lower demand in the key northern heating markets," said Paul Flemming. "Power prices in December could be moderated by continued weakness in the gas markets."

WSI, which provides customized weather information to energy traders, will issue its next seasonal outlook (for the November-February period) on October 19.

About WSI:
WSI Corporation is the world's leading provider of weather-driven business solutions for professionals in the energy, agriculture, insurance, 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. More information about WSI can be found at http://www.wsi.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 http://www.esai.com.

Contacts:
Kristen Sullivan    
Weather Services International     
(978) 983-6607    
ksullivan (at) wsi.com    

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

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

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