WSI: Winter to Finish with a Bang Across Northern US

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Very Cold February Expected Many Northern Locales, Followed by Quick Return to Above-Normal Temperatures as Spring Emerges

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The first half of winter has been … mild across the eastern … US, while the western US has suffered through a cold winter so far. However, the pattern has … changed to allow much colder temperatures to plague the eastern US for … the back half of winter.

WSI (Weather Services International) expects the February-April period to be colder than normal across much of the northern half of the US. Above-normal temperatures will be common across the southern US, especially in the Southwest. The WSI seasonal outlooks reference a standard 30-year normal (1981-2010).

“The first half of winter has been quite mild across the eastern half of the US, while the western US has suffered through a cold winter so far,” said Dr. Todd Crawford, WSI Chief Meteorologist. “However, the pattern has recently changed to allow much colder temperatures to plague the eastern US for much of the back half of winter. A significantly weakened polar vortex will allow bitterly cold Arctic air to spread southward across the north-central and much of the eastern US during February. By March, however, most of the objective forecasting guidance suggests that above-normal temperatures will return to the eastern US, likely persisting through much of the spring. The impacts from the multi-year drought across the Plains will also likely favor an early emergence of spring across much of the central and eastern US, especially if the remainder of winter is fairly dry in these regions as we currently expect.”

In February, WSI sees the monthly breakdown as:
Northeast* – Colder than normal
Southeast* – Colder than normal
N Central *    – Much colder than normal
S Central*     – Colder than normal, with the exception of Texas
Northwest* – Colder than normal
Southwest* – Warmer than normal

According to Chris Kostas, Senior Power and Gas Analyst at ESAI,“In February, colder-than-normal temperatures and above-average heating demand in the Midwest, Northeast, and Mid-Atlantic regions will boost aggregate North American natural gas demand and will help to support gas prices. The below-normal temperatures in these key gas demand regions will more than offset the below-normal heating demand associated with mild temperatures in the Southwest and California. Typically, Mid-Atlantic gas basis prices would surge under these circumstances, but with new shale gas supplies growing steadily in Pennsylvania, Tetco M3 gas prices should only experience modest price strength relative to Henry Hub during the month. The above-normal aggregate heating demand should help to rebalance inventories and which began the winter heating season at a record high level. While the colder-than-normal temperatures expected in the Midwest will increase power and gas demand in the region, the upside to gas prices may be limited. Coal-fired generation that has been sidelined due to poor economics should find some breathing room to increase run rates in February as gas demand for power competes with demand for heating and strengthens gas prices marginally. As coal-fired generators increase output levels during the coldest days their increased generation should begin to relieve the need for gas for power generation. This should act as a soft ceiling for power and gas prices in the Mid-West (i.e. PJM and MISO). In New England and parts of New York, however, gas and power prices are likely to experience higher price volatility and sharp price increases in February due to pipeline constraints during the coldest days. Power and gas prices in Texas and California are expected to be soft due in February due to lower weather-related demand in those regions.”

In March, WSI forecasts:
Northeast     – Warmer than normal
Southeast     – Warmer than normal
N Central     – Warmer than normal
S Central     – Warmer than normal
Northwest     – Colder than normal
Southwest – Warmer than normal, with exception of coastal California

“With mild March temperatures expected over most of the country (except California and the Northwest), aggregate North American gas demand should finish the winter heating season very soft. This will likely soften natural gas prices from the expected price increase in February. With natural gas production expected to remain strong through the winter, a mild March could easily leave natural gas inventories above 2,000 Bcf again this year. ESAI is currently forecasting an end-of-season inventory level of 2,150 Bcf, which is moderately higher than market consensus. Soft heating demand and below-normal electrical loads in March increase the downside risk profile for power and gas prices in ERCOT, MISO, PJM, New York and New England. However, implied market heat rates could firm in these regions as marginal coal units begin to be priced out of the market again on lower gas prices and poor economics,” Kostas noted.

In April, WSI forecasts:
Northeast     – Warmer than normal
Southeast     – Warmer than normal
N Central     – Warmer than normal
S Central     – Warmer than normal
Northwest     – Colder than normal
Southwest – Warmer than normal, with exception of coastal California

“While weather-related demand is in April is low, with mild temperatures expected for nearly the entire country (except the Northwest and parts of California), aggregate North American gas demand should begin the spring very soft. The much warmer-than-normal temperatures expected in parts of Texas, however, could boost early cooling demand in ERCOT. With gas demand low in March and April and robust inventories expected to begin the injection season we believe natural gas prices are likely to be soft and stable in April. Henry Hub gas price volatility is likely to be relatively low in April as well while implied market heat rates are likely to firm as generation maintenance increases throughout the month,” Kostas added.

WSI provides customized weather information to global commodity traders via its industry-leading WSI Trader Web site. WSI will issue its next seasonal outlook on February 26.

*To view the map defining WSI’s US regions, click here.

About WSI Corporation
WSI (Weather Services International) and Weather Central are the world's leading providers of weather-driven business solutions for professionals in the energy, aviation, insurance and media markets, as well as multiple federal and state government agencies. Together they comprise the professional division of The Weather Company and are owned by a consortium made up of NBC Universal and the private equity firms, The Blackstone Group and Bain Capital.

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

Linda Maynard    
(978) 983-6715    

Tommy Sutro
Energy Security Analysis, Inc.
(781) 245-2036

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Linda Maynard
WSI Corp.
(978) 983-6715
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