Cooler-than-normal temperatures are likely to dominate most of the eastern U.S. over the next three months, while above-normal temperatures are expected across the West, according to forecaster WSI Corp. of Andover, MA.

“The North Atlantic and North Pacific oceans are now both cooler than normal for the first time in 15 years. This fact, along with a lack of any significant drought conditions in the eastern U.S. and a trend towards El Nino conditions, should result in a relatively cool summer east of the Rockies,” said WSI seasonal forecaster Todd Crawford. “We do think that the best chance for market-moving heat in the Northeast will be early in the summer, before a cooler pattern sets in during the last half of the summer.”

The highest probability for a cool summer is in the Southeast, while the Southwest, Rockies, and Northwest are most likely to have a warm summer, WSI said.

In its Energycast Outlook for June WSI forecast cooler-than-normal temperatures in the Southeast and South-Central regions, with warmer-than-normal temperatures in control in the Southwest (except coastal California) and all of the nation’s northern tier.

“A marginally higher probability of early-season heat events is bullish for electricity demand and prices, although prices will be tempered by lower demand due to economic conditions,” said Paul Fleming, Energy Security Analysis Inc. (ESAI) director of power and gas, in a statement issued in conjunction with WSI’s outlook. “Cooler weather in the Southeast and South-Central regions as well as California should result in slightly lower gas demand from the power sector, providing an offset to higher demand expectations in the Southwest.”

By July cooler-than-normal temperatures will be in place in across all of the East and Central U.S., as well as coastal California, while warmer-than-normal temperatures will remain in the Northwest and Southwest regions, according to the WSI forecast.

“Cooler-than-normal temperatures across most of the country will result in significantly lower gas demand and would be bearish for prices in the absence of hurricane activity,” Fleming said. “Power prices in the major markets are likely to be moderate with lower demand expectations due to the cooler outlook and the economic climate, as well as a low gas price environment. The cooler outlook reduces the likelihood of major heat events.”

While WSI expects warmer-than-normal temperatures to return to the North-Central region and coastal California in August, the rest of the forecaster’s temperature map remains unchanged from July. Cooler-than-normal temperatures will continue to dominate the East and the South-Central region, while warmer-than-normal temperatures will continue in the West, WSI said.

“Two months of below-normal demand this summer would be bearish for natural gas prices in light of market expectations that natural gas inventories are already expected to be very full at the end of the injection season,” Fleming said. “Cooler temperatures, lower demand for power and low natural gas prices will continue to moderate power prices in most markets this August.”

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.

The seasonal outlook follows WSI’s prediction of a mild 2009 Atlantic hurricane season (see Daily GPI, May 27). WSI’s forecast called for a total of 11 named storms, including six hurricanes, with two of them intense (Category Three or greater), forming between June 1 and Nov. 30.

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