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WSI Forecasters Expect Spring Break from Northeast's Unusually Cold Weather

Unusually cold weather that has had a grip on the Northeast for much of the 2013-2014 winter will be replaced by warmer-than-normal temperatures beginning in May, but colder-than-normal weather may persist in the Southeast and Great Lakes areas, according to forecasters at Weather Services International (WSI).

Before the Northeast can start to warm up it will have to endure temperatures averaging colder than normal yet again in April, as will the Southeast (except Florida) and North Central regions, the forecasters said.

"Although we do not expect the unusual magnitude of the March cold, relative to normal, to continue into April, we do expect a general persistence of the same pattern we've seen much of the winter," said WSI Chief Meteorologist Todd Crawford. "That means warmer-than-normal temperatures in the West and below-normal temperatures across much of the central/eastern U.S."

Weather-related demand for natural gas is typically soft in April, but cold weather in the Northeast "could extend the withdrawal season into early April and help to bolster gas prices during the first half of the month," according to Energy Securities Analysis Inc. Senior Analyst Chris Kostas.

"The start of generator maintenance and low inventory levels should also help to support natural-gas prices in April. Early cooling demand in the Southwest should also create a bullish energy environment and help to slow injections."

By May, WSI expects warmer-than-normal temperatures to dominate the Northeast, leaving only the Southeast and North Central still in the colder-than-normal column.

"With slightly warmer-than-normal temperatures expected over much of the country in May, power and gas prices are likely to find continued fundamental support," Kostas said. "Generation maintenance combined with slightly higher-than-normal electrical loads should help to support implied market heat-rates throughout the country, but particularly in Texas, where the cooling season starts earlier.

"Natural gas storage injections will likely run around 3.0 Bcf/d above last year's level. Increased injection demand should support prices in May. Increased natural gas production and higher year-over-year coal-fired generation should help to offset some of the increased demand, however, and prevent prices from running-away to the upside."

Reversing the colder-than-normal trend that has dominated the winter months, June is expected to be above warmer nationwide, except the North Central region, Florida, Colorado and New Mexico, according to the WSI forecasters. That would give strength to implied market heat-rates, Kostas said.

"After the extraordinarily cold winter caused inventories to draw down to very low levels this past winter, a warmer-than-normal start to the summer could help to push natural gas prices firmly higher in June," he added.

The National Oceanic and Atmospheric Administration last week said it too expects below-normal temperatures this spring for an area encompassing the northern plains and the Great Lakes region (see Daily GPI, March 21).

In an early preview of summer weather, Crawford said WSI expects an El Nino event to develop and "northeastern Pacific ridging to become an important driver, which should keep the risks of excessive heat limited to parts of the western U.S."

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