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WSI Sees Warm North, Cool South for February-April

Expecting it to be the complete opposite of current weather conditions, WSI Corp. said last week that the February-April period should bring cooler-than-normal temperatures generally south and east of a line from Phoenix to Dallas to Raleigh, NC, with warmer-than-normal temperatures to be the rule elsewhere, especially in the northern tier of states.

If the Andover, MA-based forecasting company's three month outlook holds up, then people in some of the Midwest and Northeast states who have been clattering their teeth could be in for a reprieve, while residents of states such as Florida and Arizona might be pulling out their jackets.

"Our latest forecast models indicate that the rest of the winter and early spring will be characterized by relatively warm temperatures across the northern half of the U.S.," said WSI seasonal forecaster Todd Crawford. "Any below-normal temperatures will be confined to the southern U.S."

For February, WSI said it should be warmer than normal for the entire northern United States, especially in North Dakota, Minnesota, Idaho and Montana, while the entire southern part of the country should be cooler than normal, except for California.

WSI said that the warmer weather in the North will moderate gas demand from these high demand critical areas and will be moderately bearish for prices. "Natural gas pipeline constraints remain an issue in the Northeast during extreme cold weather," WSI noted. "Heating oil demand is dominated by the Northeast where the warmer-than-normal temperature outlook should have a bearish impact on demand and price. Across the country, the southern states will experience cooler-than-normal temperatures but the impact on overall gas demand should not be significant."

The month of March is expected to bring more of the same from February, with the entire North experiencing warmer than normal temperatures, especially New York, North Dakota, Minnesota, Wisconsin, Michigan, Washington and Oregon. The South Central region of the country is also expected to be warmer than normal, with the remainder of the South once again coming in cooler than normal, except for Arizona and New Mexico.

"The warmer outlook in the northern gas demand areas should provide the market with a lower demand outlook for March and an easing of supply concerns that should ultimately provide a bearish price fundamental price signal, especially when combined with the warmer February outlook," WSI said. "In March, electrical loads will begin to moderate seasonally and power prices should ease due to lower loads and potentially lower fuel prices."

According to WSI, April will bring cooler than normal temperatures to the Southeast, North Central and South Central United States, while the Northeast, Northwest and Southwest are expected to be warmer than normal for the month.

"April is a shoulder month for both natural gas and power demand," WSI said. "With generally lower loads, power prices are not as responsive to the more moderate changes in weather. Generator maintenance programs and nuclear outages will have a greater impact on power prices than weather in most markets."

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