While some areas of the country appear to be out of the woods as far as heat is concerned, a majority of the East Coast still appears to be in for some warmer than normal temperatures from August through October, according to WSI Corp.
The forecasting and business solutions provider said it expects the three-month span to average cooler-than-normal in most of the Plains, Great Lakes states, Ohio Valley, and coastal California, with warmer-than-normal temperatures expected elsewhere.
“We expect the bulk of the cool air to remain over the Plains during the August-October period, with the warmest temperatures in the Pacific Northwest and the Southeast,” said WSI seasonal forecaster Dr. Todd Crawford. “October itself looks to be the coolest of the three months, relative to normal, over the northern and central Plains.”
For August, WSI is calling for warmer-than-normal temperatures for most regions, except in New England, northern New York, the North Central states and coastal California, which will be cooler-than-normal. Georgia, Florida and Alabama should be especially warm during the month.
“While the warmer outlook for the southern and western states is bullish for gas consumption in August, the cooler outlook for the heavily populated Northeast and California areas should offset the higher consumption areas,” WSI said. “Gas consumption should be neutral and should not detrimentally impact expected injections to storage.”
On the electricity side, the forecaster said that August’s cooler temperatures in the key electric markets of New York, New England and California is bearish for prices due to the fact that high cost units should spend less time on the margin setting price.
September will continue the warmer than normal trend in the Southeast and Western states, particularly in the Southeast, while cooler-than-normal weather in the North Central and Plains states will “dampen overall gas demand in September, possibly leading to a softening of gas prices,” WSI said. The California coast is expected to remain cool, while Florida, Georgia and Alabama are joined by South Carolina as states that are expected to be especially warm. For electricity, the company said it expects that the likelihood of major heat events in September in the Northeast and California appears lower, and power prices in these regions should be moderate as a result.
In October, the East and a majority of the West are expected to remain warmer than normal while the central states will be cooler than normal. WSI’s forecast indicates cooler-than-normal temperatures in the North Central and Plains states including Texas. “October is a shoulder month and variations in weather have much less impact on the moderate demand for natural gas and power,” WSI said. “If temperatures are much cooler-than-normal in late October, some early season natural gas demand could kick in which would only be bullish if inventory builds were lagging expectations.”
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