Much of the eastern United States will experience generally mild temperatures through the end of the year despite an El Nino event in the tropical Pacific Ocean, as cooling waters in the more northern Pacific begin to exert their influence on North American weather patterns, according to forecasters at Andover, MA-based Weather Services International (WSI). The western third of the country and parts of the Southeast will average cooler than normal over the next three months, WSI said.

"Evidence is continuing to build that the emerging El Nino event is going to be relatively weak, and WSI believes that the impacts of the strong PDO [Pacific Decadal Oscillation] signal will more or less trump the El Nino signal, going forward," said WSI Chief Meteorologist Todd Crawford.

"The biggest wild card heading toward winter is the degree of atmospheric blocking in the North Atlantic, typically referred to as the North Atlantic Oscillation (NAO). Over the last few winters there have been wild swings in the NAO, from historically strong blocking winters (2009-10 and 2010-11) and very cold eastern U.S. temperatures, to historically weak winters (2011-12) with record warm temperatures.

"It is still too early to predict the behavior of the NAO for the upcoming winter, but it is clearly the key to a successful winter forecast. For now, we are relying on the PDO signal, which generally suggests a cool period for the western U.S. and a mild period in much of the East."

WSI expects warmer-than-normal temperatures to dominate across the entire country except Florida and the West in October, a pattern that would ensure power and natural gas demand is soft and stable, according to Energy Securities Analysis Inc. senior analyst Chris Kostas.

"Gas prices will likely remain subdued as below-normal heating demand helps to push natural gas inventories above last year's record," Kostas said. "Low gas prices and soft shoulder-season demand will keep power prices under pressure. Some power price weakness will be offset by seasonal generation maintenance, however. Implied market heat rates should be firm as gas-fired generators continue to replace coal-fired generators that are struggling to compete in the low gas price environment."

WSI's forecast map remains essentially the same in November, with cooler-than-normal temperatures in the Southeast, and eastern Texas dropping out of the warmer-than-normal category the only changes.

"Warmer-than-normal temperatures in the Northeast and the Great Lakes region in November will reduce early season heating demand in those key regions," Kostas said. "Gas prices should remain soft due to below-normal heating demand. The mild temperatures should also ensure that natural gas inventories will hit a new record in November. In Reuters' most recent end-of-season storage poll, analysts forecast natural gas inventories will peak at 3,973 Bcf (ESAI's forecast is 3,925 Bcf)."

An Energy Information Administration (EIA) official recently said he expects gas demand for electricity generation this winter to be about the same as it was last winter (see Daily GPI, Sept. 14). The power burn will likely be 2.5-2.6 Tcf, and the amount of coal-fired generation capacity that is used during the winter months will depend on natural gas prices, EIA Deputy Administrator Howard Gruenspecht said. In its most recent Weekly Gas Storage Report, EIA reported 3,496 Bcf in storage, which was 320 Bcf more than a year ago and 278 Bcf more than the five-year average.

By December WSI expects temperatures to average warmer than normal in the Northeast, Central (except the Dakotas and northern Minnesota) and Southwest (except southern California), while the Southeast and Northwest are expected to be colder than normal.

"With mild temperatures expected to stretch from Texas to New England in December, delivered gas prices are likely to remain subdued heading into winter," Kostas said. "Natural gas basis pricing in the Northeast typically begins to increase delivered gas prices in December. However, with mild weather and continued growth of Marcellus shale gas production this year, Northeast basis prices are expected to be very soft, relative to historic averages. New England could be the exception, however, as Algonquin Citygates basis pricing has been demonstrating seasonal strength.

"Power prices in MISO, PJM and New York are likely to be soft, as a result of the mild, early winter power demand and weak delivered gas prices. Power and gas prices are also likely to be soft in ERCOT in December due to the mild temperatures," Kostas said.

WSI is scheduled to issue its next seasonal outlook on Oct. 23.

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