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WSI's Feb-April Forecast Looks for Cold to Return to the Northeast

After a month of well above normal temperatures, some winter cold might be ready to take hold in areas of the country over the next three months, according to Andover, MA-based WSI Corp. The weather forecasting firm said its seasonal outlook for the February-April period calls for cooler than normal temperatures in the northeastern states with warmer-than-normal temperatures elsewhere.

"It appears that, after a prolonged stretch of very mild weather in the eastern U.S., that winter will return in February," said WSI seasonal forecaster Dr. Todd Crawford. "In fact, we feel that the next few months will be characterized by cooler-than-normal temperatures in the Northeast U.S."

In the company's monthly breakdown, the entire East along with the north central portion of the country are expected to endure colder than normal temperatures, while the West and south central portions of the U.S. will remain warmer than normal for the time of year.

Commenting on WSI's forecast for February, Energy Security Analysis Inc. (ESAI) said real cold weather finally arriving in the Northeast could spark natural gas prices. "In areas with congested local gas pipeline infrastructure such as New England and New York City, severe cold weather may cause sharp increases in delivered prices of gas to these areas as deliveries become constrained," ESAI said.

"The cooler-than-normal temperatures in the Northeast and North Central regions will increase natural gas demand, but warmer temperatures in the rest of the country will moderate overall demand." ESAI warned that cooler weather in February may cause some upside volatility in gas prices, but the market is no longer concerned about low inventories at the end of the heating season. Power prices in February will also be volatile in the Northern regions as loads increase during the colder periods.

Despite WSI's three-month forecast of cold in the Northeast, that region of the country is expected to take a small break in March. WSI expects a warmer than normal East, except for in Maine and New Hampshire. The entire central area of the country is expected to see warmer than normal temps for the month, while the West comes in colder than normal, except Idaho and Montana.

ESAI said the warmer temperature outlook for the last month of winter should provide for lower natural gas demand and lower withdrawals from storage. "As current inventories are well above the five-year average already, warmer weather in March will add additional bearish sentiment to the gas market," the firm said. "Power prices will be moderate in most markets under this warmer outlook, but cooler periods should provide a bullish price response due to higher load demands."

April brings a mixed bag of weather conditions to the country, with a cooler than normal north central region and Northeast -- minus Pennsylvania and New Jersey. Warmer than normal conditions are likely to prevail elsewhere with the exception of Idaho and Montana.

ESAI pointed out that as seasonal temperatures increase into spring, the cooler temperatures have much less impact on heating demand. "Warmer-than-normal temperatures across the rest of the country will offset the late season gas demand for heating and electric loads," the company said. "Cooler weather in the northern regions in this latter portion of the heating season is unlikely to have a material impact on natural gas prices." ESAI also said that power prices during April are more likely to be affected by generator outages as the maintenance season commences.

WSI's next new forecast package (for March-May) will be issued to clients on Feb. 14 and to the press on February 21.

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