WSI: Warm October Followed by Colder November/December in US

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WSI and ESAI Expect Total US Heating Demand during October-December Period to be within 1-2% of Both Last Year and 30-Year Averages.

WSI (Weather Services International) expects the upcoming period (October-December) to average warmer than normal across the northeastern US and parts of the Southwest, with below-normal temperatures expected in the Southeast and the Pacific Northwest. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).

“The combination of the La Nina event, a relatively cold north Pacific, and a record warm north Atlantic are quite bullish for a very warm October, especially across the northeastern quarter of the country” said WSI Chief Meteorologist Dr. Todd Crawford. However, the historically persistent negative phase of the North Atlantic Oscillation and the strength of the North Pacific climate signals suggest that the widespread warmth in October will be short-lived with more widespread cold across the eastern US in November and December. For the October-December period as a whole, we are forecasting 1776 gas-weighted heating degree days, within 1-2% of both last year and the 1971-2000 mean.”

In October, WSI predicts regional temperature anomalies as follows:
Northeast     – Warmer than normal
Southeast     – Cooler than normal
N Central     – Warmer than normal
S Central     – Warmer than normal
Northwest     – Cooler than normal
Southwest     – Warmer than normal, except coastal California

According to Paul Flemming, Director of Power and Gas at ESAI, “In October, WSI is forecasting much-warmer-than-normal temperatures throughout Northeast and Midwest regions.” According to Flemming, “Power demand in most regions will reflect shoulder-season temperatures and warmer-than-normal temperatures will have less impact on load. Power prices will be more reflective of planned seasonal generator maintenance which will reach its highest levels in most regions during October. Gas demand for heating is likely to be delayed with warmer temperatures expected across the northern tier regions, but this could be offset somewhat by increased demand from the power sector due to coal and nuclear outages.”    

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

“In November, WSI is forecasting warmer-than-normal temperatures in the Northeast and Central regions with cooler temperatures expected in the Southeast and Western regions. Given the WSI outlook for November, gas demand for heating should be normal or slightly below normal. Power prices will continue to reflect lower load conditions in November, although generator maintenance will provide a bullish underpinning in most markets to otherwise weak prices.”

In December, WSI forecasts:
Northeast     – Colder than normal
Southeast     – Warmer than normal
N Central     – Colder than normal
S Central     – Warmer than normal
Northwest     – Colder than normal
Southwest     – Warmer than normal, except coastal California

“WSI is forecasting colder-than-normal temperatures across the northern tier of the country.” Flemming notes that, “Colder weather in December tends to spark concern over the possibility of a very cold winter and is bullish for natural gas prices. Heating-related demand for gas and power will be above normal in all of the key heating markets and inventory draws from natural gas storage would be expected to be above normal. Slightly warmer weather in the Southern and Gulf states will not provide much offset to heating demand in the North.”

WSI, which provides customized weather information to energy traders, will issue its next seasonal outlook (for the November-January period as well as the first complete look at winter) on October 26.

About WSI
WSI (Weather Services International) 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 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:
Linda Maynard    
WSI
(978) 983-6715    
lmaynard(at)wsi(dot)com

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

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

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Linda Maynard

Barbara Rudolph
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