Any skepticism over a “Siberian Express” arctic cold front making a stop in the Lower 48 was quickly wiped away last week as temperatures plummeted into the teens, 20s and low 30s across much of the Northeast, Midwest and Midcontinent. The only question left was just how long it would be parked over the central and eastern regions of the United States.

According to Salomon Smith Barney meteorologist Jon Davis, it might stay through at least the end of the month, drawing down storage levels and continuing to prop up gas prices.

Natural gas consumers should expect “a material increase” from their recent “eye-popping” December and January heating bills, noted UBS Warburg analyst Ron Barone. New York City Gate prices were near $8 late last week, while the Henry Hub was near $5.50. With higher prices, the analyst warned that the average consumer should expect a significant increase in per unit gas costs throughout the course of the 2003/2004 winter heating season. “If this is the case, we believe the industry will experience an elevated level of elasticity of retail demand which could rebalance pricing over the intermediate-term,” he added.

Barone said he is considering revising upward his 2003 price forecast. “This would suggest that our ahead-of-the-Street January 2003 assumption of $4.40 (and 1Q03 forecast of $4.10) is conservative,” he said.

Temperatures were warmer than normal at the beginning of the month, but then, as Davis explained in his weekly weather update, “the pattern rapidly switched into a higher amplitude pattern that featured a ridge of high pressure over the western U.S. and a trough over the central/eastern United States. As the trough ‘dug’ into the eastern half of the United States, arctic air quickly began streaming into the area. This caused temperatures to crash from the warm levels of late last week to below normal levels this week.”

The National Weather Service’s (NWS) latest 6-10 day outlook agrees with Davis’ forecast. It shows the only area of above normal temperatures confined to the Southwest, California, the southern Rockies and West and South Texas. The rest of the country is expected to see below normal temperatures for the period.

As long as the trough remains in place, Davis looks for the arctic airmasses to continue to surge into the region. In the western U.S., the ridge of high pressure blocks arctic air from moving in and caused temps to warm up this week. “As long as this high amplitude pattern persists, the far West will remain warm and the central/eastern U.S. will remain cold.”

The meteorologist said the current pattern looks very stable both across North America as well as the Atlantic and Pacific Oceans, noting that high amplitude patterns tend to be stable and last for more extended periods of time. “Duration is discussed in number of weeks rather than number of days,” Davis said. “This will be the mean or average pattern at least through the end of the month. Thus, the central and eastern U.S. will be colder than normal, while the far West is warmer than normal.”

Through Monday, SSB’s forecast shows that the coldest conditions will be most concentrated in the eastern third of the country from the East Coast to the Great Lakes, with the Southeast registering 10-14 degrees below normal. The western third of the U.S. will have varying degrees of above normal temps.

As a result, heating demand will be very high and well above normal in the eastern third of the Lower 48 and adjacent areas of Canada, while demand will be very low in the western third of the nation. Davis said most areas of the country’s midsection will see demand average out to be normal, due to wide swings in day to day temps. He said he expects the midsection to be on the cold side during the next few days and then briefly warm up late in the Martin Luther King Jr. holiday weekend.

And then it really gets bad unless you’re a polar bear or long on natural gas or heating oil. Davis said the Jan. 21-27 period will be “dominated by an intense arctic airmass that will be moving into the Northern Plains (Montana and the Dakotas) early in the week and gradually ooze south and east throughout the week.” Calling the airmass “the strongest yet in the current parade of arctic airmasses,” Davis said the strength, extent, and gradual southeast movement will allow this airmass to dominate the weather in the central and eastern Lower 48 during this entire period.

Most of the central and eastern U.S. will have substantially (10-14 degrees) below normal temps with an area in the Northern Plains having near record lows (15 degrees or more). Even the western U.S. will not be able to sit this one out as the western state temperatures will cool off to normal levels.

“All in all, heating demand during this period will be extremely high in all the major population centers in the central and eastern U.S.,” Davis said “Beyond this period, we expect further intrusions of arctic air into the central and eastern U.S.”

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