Spring temperatures are expected to be either at or below normal across the northern and western United States, but warmer than normal in parts of the South Central and Southeastern states, according to Andover, MA-based WSI Corp.
As a result, WSI predicts that thermostats for the March-to-May period will be cranked up 20% more than last year and 3% more than the 1971-2000 average.
"As a very cold winter comes to a close, La Nina is clearly in complete control of the pattern as we head into spring," WSI Chief Meteorologist Todd Crawford said. "The tremendous North Atlantic blocking episode during the first half of winter has subsided, allowing for a more textbook La Nina pattern to develop, specifically cold weather across much of the northern and western U.S. and occasional glimpses of warmer temperatures across parts of the southern and eastern U.S."
Crawford said WSI forecast 1,248 gas-weighted heating days for the March-May period as a whole, 2-3% higher than the 1971-2000 mean average and 20% higher than the same period last year, which had a very warm spring.
"We expect this general pattern to continue through much of spring, with the forecast risk focused around the less predictable sub-seasonal signals (Madden-Julian Oscillation)," Crawford said.
WSI's forecast for March calls for colder-than-normal temperatures in the Northeast, North Central, Northwest and Southwest areas, and warmer-than-normal temperatures in the Southeast and South Central states.
Chris Kostas, a senior analyst with Energy Securities Analysis Inc. (ESAI), said natural gas inventories -- which started the year in record territory -- diminished quickly in January and early February as bitter cold gripped most of the nation.
"After a brief respite from the unseasonably cold weather in mid-February, however, WSI is forecasting the return of colder-than-normal temperatures through much of the Consuming East and Consuming West in March," Kostas said. "This should draw down inventories to levels much lower than most analysts expected at the beginning of the season."
Kostas said ESAI expects natural gas inventories to be 1,550 Bcf at the end of the season, 100 Bcf lower than what was forecast one month ago. He blamed the reduction on cold temperatures in early February and the forecast for more cold weather in March.
"If withdrawal rates were to match the five-year average over the next six weeks, ending stocks would end the season closer to 1,350 Bcf," Kostas said. "We believe, however, that despite the above-normal weather-related demand in March, high production levels and the steeper contango between the CME April and August contracts will reduce weather-normalized withdrawal rates. Above-normal heating demand and increasing calendar spreads into summer should keep gas prices from collapsing in March. Conversely, high production rates and adequate inventory levels should keep gas prices under wraps should the final four weeks of the winter turn out to be colder than expected."
WSI predicts that April will be warmer than normal in the Northeast, Southeast and South Central parts of the country. Meanwhile the North Central, Northwest and Southwest will see colder-than-normal temperatures. Kostas said heating demand typically drops off during the month -- usually about 30% lower from March -- on a weather-normalized basis.
"With the bulk of above-normal temperatures expected over key consuming areas of the Northeast and South Central regions of the country, we expect eastern gas basis prices -- and power prices in PJM, New York and New England -- to be relatively soft in April," Kostas said. "In the West, however, where April heating demand is still a factor for energy demand, gas and power prices may remain firm."
Kostas said hydro generation in the Northwest could be delayed because colder-than-normal temperatures would hamper early snowmelt rates. He added that cold weather in California could keep implied market heat rates and power prices higher than normal in the Golden State.
WSI forecast colder-than-normal temperatures during May in the Northeast and North Central states; the Southeast, South Central, Northwest and Southwest should be warmer than normal. Kostas said that while the demand for heating and cooling was usually low in May, implied market heat rates could run high in Texas if warmer than normal temperatures arrive early, and in the Northeast if colder-than-normal temperatures linger.
"On balance, gas prices could be soft but well supported as the Consuming East continues to burn gas for heat and the storage injections begin in earnest," Kostas said.
Paul Pastelok, the newly appointed chief long-range forecaster for AccuWeather.com, predicted that storms and cold weather would hit the Plains and Northeast areas of the country through the first seven to 10 days of March. Although his official forecast for spring will be released in early March, Pastelok said cold and wintry events could continue from late March into early April.
The National Oceanic and Atmospheric Administration (NOAA) reported Feb. 15 that January 2011 was the 17th warmest January -- for combined global land and ocean surface temperature -- since records began in 1880, and attributed the cause to La Nina. NOAA predicted that La Nina conditions could persist but should be weaker, if not neutral, by May to June.
WSI is scheduled to release its next seasonal outlook report on March 22.
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