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WSI Forecasts Warm North, Cooler South for February-April

For the next three months, between February and April, the northern two-thirds of the United States should expect warmer-than-normal temperatures, with below-normal temperatures confined to the South, according to the latest seasonal outlook by WSI Corp.

"While the late January pattern will be characterized by more frequent visits from Arctic air masses, our objective model guidance suggests that the recent pattern flip to a northeastern Pacific ridge may be temporary, possibly driven by the recent strong pulse of the Madden-Julian Oscillation," said WSI forecaster Dr. Todd Crawford. "We feel that a milder pattern will reemerge by early or mid-February and will generally persist into March."

In February, WSI is forecasting warmer-than-normal temperatures across the northern tier of the country, especially in Idaho, Montana and Wyoming. The southern regions, with the exception of Oklahoma, Kansas, Utah and Nevada, should expect to see colder-than-normal temperatures.

Looking at WSI's February outlook, Energy Security Analysis Inc.(ESAI) said warmer temperatures in the northern regions are expected to result in lower demand for natural gas from both the heating and power sectors, while in the southern regions, cooler temperatures will not add enough demand to provide a significant offset to lower demand in the northern regions.

"The outlook for mild February temperatures in the major gas-consuming regions should contribute to high end-of-season natural gas inventories in April," ESAI said. "Due to the expectation of moderated natural gas prices and warmer temperatures which will reduce loads, power prices throughout the northern regions should also be moderate."

By March, Texas is the only state not expected to have warmer-than-normal temperatures, according to the forecast. Warmer temperatures are especially likely in New Jersey, Pennsylvania, Minnesota, North Dakota, Nevada and Utah, according to WSI.

"In the key heating demand areas across the northern tier of the country, natural gas consumption should continue to be lower than the five-year average," ESAI noted. "With the mild January to date and the outlook for a warmer-than-normal February, the warmer March outlook should add to the bearish sentiment for natural gas prices. Lower natural gas prices and lower loads with warmer temperatures will translate into lower power prices in most regions."

The WSI April forecast is predicting cooler-than-normal temperatures across most regions, especially Florida, but not Minnesota or North Dakota. The Southwest, with the exception of California, Nevada and Utah, are expected to be colder than normal. Warmer-than-normal temperatures are seen in the Northwest, notably in Washington and Oregon.

"Cooler weather across much of the Midwest may bring some late-season natural gas inventory withdrawals that are higher than average," ESAI said. "However, above-average April gas withdrawals will not be high enough to materially impact what are likely to be very high end-of-season inventory levels. Shoulder period demand levels in most power demand areas means that temperature variations will not impact prices significantly. Seasonal planned generator maintenance will have more impact on prices than weather in April."

The WSI seasonal outlook references a standard 30-year normal (1971-2000). An update is expected to be issued on Thursday, with the next forecast package for the three-month period between March and May issued on Feb. 13.

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