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WSI Forecast: East to Heat Up in June, Cool Down in July

Cooler-than-normal temperatures will dominate the Southeast and Pacific Coast states in June, July and August, while warmer-than-normal air will settle over much of the rest of the country, especially in the northern Rockies and northern Plains, according to forecaster WSI Corp. of Andover, MA.

"A significant transition from cool May temperatures to significantly warmer June temperatures is expected across the Northeast, while much of the western half of the U.S. remains cool," said WSI seasonal forecaster Todd Crawford. "By July, we expect the most significant heat to emerge in the northern Plains, while July and August will be fairly close to normal in the major Northeastern cities. A cool summer is expected in the Southeast, consistent with the very strong northern Pacific Ocean temperature signal that is currently occurring."

In its Energycast Outlook for June, WSI forecasts warmer-than-normal temperatures in the East, with cooler-than-normal air dominating all of the rest of the country except Texas.

Energy Security Analysis Inc. (ESAI) said warmer temperatures, while 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 will extend heating degree days into May, and will also provide a firm price environment for natural gas, ESAI said. 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.

The WSI forecast for July calls for a near reversal of the June temperatures map, with cooler-than-normal air taking over in the East and warmer-than-normal temperatures predicted for the West (except for coastal locations) and South Central regions. The North Central region can expect much warmer-than-normal temperatures in July, WSI said.

Higher-than-normal cooling demand for the Southeast and Eastern Seaboard in July will be offset by lower-than-normal demand expected throughout the central portion of the U.S. and along the West Coast, ESAI said. 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 California Independent System Operator power prices and implied market heat rates, according to ESAI.

WSI looks for warmer-than-normal temperatures across much of the country in August, while California and the Eastern Seaboard are expected to be cooler than normal. Spot natural gas prices will likely be firm in July, though implied market heat rates and congestion pricing in the New York, New England and the Mid-Atlantic region are likely to be softer and more stable than otherwise, ESAI said. The same can be said for California, where cooler-than-normal temperatures will continue to linger, ESAI said.

The WSI seasonal outlooks reference a standard 30-year norm (1971-2000). The next forecast, for July-September, is scheduled to be issued June 24.

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