NGI The Weekly Gas Market Report / NGI All News Access

WSI Forecast: Cold North, Warmer South Through May

Colder-than-normal temperatures will dominate weather in the East and Northeast over the next three months, while above-normal temperatures can be expected across much of the South, according to forecaster WSI Corp. of Andover, MA.

"The general pattern of cold-north and warm-south observed during the winter will generally continue into early spring," said WSI seasonal forecaster Todd Crawford. "The warmest temperatures, relative to normal, will continue to be in the south-central states, where drought conditions may linger and create a positive feedback loop that will help to perpetuate the warm and dry conditions. The coolest temperatures this spring, relative to normal, will occur in the western U.S. as a persistent Aleutian ridge continues to flex its muscle."

In its Energycast Outlook for March WSI forecast below-average temperatures across the nation's northern tier and warmer-than-average temperatures in the Southeast, South Central and Southwest regions. Much warmer-than-normal temperatures can be expected in eastern Texas and the northern Gulf states, according to WSI.

Energy Security Analysis Inc. (ESAI) said in conjunction with WSI's outlook release that it expects the warmer weather to boost peak loads in the Electric Reliability Council of Texas area, where scheduled generator maintenance will reduce available baseload capacity modestly. Increased reliance on natural gas to fill the gap should add some marginal demand to the regional gas market and provide some weather-related support to natural gas prices. In the Northeast, cooler-than-normal temperatures should keep heating demand above the five-year average but below last year's level, ESAI said. Cooler-than-normal temperatures in Consuming West should keep weather-related demand slightly above normal. Weather-related demand for power and natural gas is expected to be above average throughout the country in March, according to ESAI.

The temperature map will remain much the same in April, with colder-than-normal temperatures forecast for the Northeast, North Central and Northwest regions and warmer-than-normal temperatures remaining in control over all of the nation's southern tier of states except the Carolinas, WSI said. The largest deviations from normal temperatures are expected again in Texas, where cooling demand will kick in slightly ahead of schedule.

Most generator maintenance is scheduled to end in ERCOT by the beginning of April, and the returning generation will offset the increase in cooling load and temper increases in heat rates and power prices associated with the warmer-than-normal temperatures in Texas, ESAI said. Heat rates in the Northeast will remain somewhat firm thanks to a combination of cooler-than-normal temperatures and generation capacity lost to scheduled maintenance. ESAI also said a significant nuclear maintenance season in the PJM area will keep heat rates firm there. Weather-related energy demand is expected to be slightly above normal in April.

Once again in May the cold-North, warm-South split will be in place, WSI said. Colder-than-normal temperatures are expected across the nation's northern tier (except in New Jersey, Delaware and Maryland), while warmer-than-normal temperatures are forecast for all of the South.

Despite ongoing generator maintenance in the Northeast and Midwest, weather-related energy demand is expected to have very little effect on prices, given the slightly cooler-than-normal forecast, ESAI said. Heat rates in the South may run slightly higher than normal, while power prices will likely be more dependent on aggregate storage levels and macroeconomic factors.

AccuWeather.com Chief Long Range Forecaster Joe Bastardi recently said he expects a North Atlantic oscillation pattern to lead to storminess along the East Coast and more winter weather in the Northeast (see NGI, March 2). A previous National Oceanic and Atmospheric Administration forecast predicted that developing La Nina conditions -- the cooling of ocean surface temperatures off the western coast of South America, which have been found to disrupt normal weather patterns in the United States -- would likely continue into spring, potentially bringing below-average temperatures to the Pacific Northwest and above-average temperatures across much of the South at least until this month (see NGI, Jan. 12).

The WSI seasonal outlooks reference a standard 30-year norm (1971-2000). The next forecast, for April-June, is scheduled to be issued March 17.

©Copyright 2009 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.