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WSI Sees 'Moderate Cold Signals' in the Northeast for October

In its most recent weather forecast released publicly late last month, WSI Corp. said it expects the U.S. to see a mixed bag of temperatures from September through November.

The Andover, MA-based forecasting agency said it expects this period to average below-normal temperatures in the Great Lakes, Northeast, Plains, and northern and central Rockies with above-normal temperatures elsewhere.

"Our seasonal forecasting models indicate a rather rude transition to fall across the northern states, particularly the northern Plains," said Dr. Todd Crawford, a seasonal forecaster with WSI. "There are strong cold signals in the northern Plains in October and November, with moderate cold signals in the Northeast in October."

Referencing a standard 30-year normal from 1971-2000, WSI's month-by-month breakdown sees September bringing cooler than normal temps in large portions of the north, including the entire Northwest and areas of the Northeast, except for New York, Pennsylvania, New Jersey, Maryland and Delaware. The remainder of the country is expected to be warmer than normal with the exception of California.

Analyzing WSI's forecast for the month, Energy Security Analysis Inc. (ESAI) said cooler temperatures in the Northeast will limit demand expectations for both electricity and gas demand from the power sector. "This will help to offset what could be higher-than-normal demand in Texas and the Southwest due to a warmer-than-normal temperature outlook," the ESAI said. "The net expectation would be for normal injections to storage, which will help to ease market fears of shortages in natural gas inventories prior to the winter."

October is expected to bring a cooling to much of the country, with the east and central portions of the U.S registering cooler than normal readings. However, the entire West is expected see warmer than normal conditions, especially in Washington, Oregon and California.

ESAI pointed out that October is a shoulder period or low demand month for both power and gas, and temperature variances from normal have relatively low price impacts. "The cooler-than-normal outlook in the eastern areas means that electric loads will be lower during the peak of the maintenance season," the ESAI said. "With lower load conditions, the impact of generator maintenance outages should be less pronounced. Injections of natural gas to storage should be stronger during most of October, although early season heating demand could develop in late October with a cooler forecast in the Northeast and North Central regions."

November sees yet more regional changes, as a vast majority of the country is expected to see cooler than normal temperatures, with the exception of the Southeast, Washington, Oregon and California, which are expected to be warmer than normal.

ESAI pointed out that a cooler-than-normal outlook for November in the northern tier of the U.S. is "somewhat bullish" for the natural gas market as early season gas demand should be higher than normal at the beginning of the withdrawal season. "Many market participants may extrapolate a cool November and higher early season demand into expectations of a cold winter, potentially driving prices higher," the company said.

WSI said its next new forecast package (for October-December) will be issued to clients on September 13 and to the press on September 20.

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