Coming off a very warm end to 2006, one forecasting firm warns that the world hasn’t seen anything yet. The Met Office, which is the United Kingdom’s National Weather Service, said late last week that 2007 is likely to be the warmest year on record globally, beating out the current record set in 1998.

If the Met Office’s forecast holds up, energy prices could come under further downward pressure as peak heating demand in the winter would likely be reduced. As an example, the mild U.S. temperatures so far this winter have already shown an effect on U.S. natural gas prices. In preparation of winter and falling temperatures, natural gas front month futures prices pushed to a high of $9.05 on Nov. 30. When seasonal temperatures did not materialize in a number of key gas-demand regions across the country, the future price of gas dropped, recording a low of $5.74 on Dec. 27.

Each January the Met Office, in conjunction with the University of East Anglia, issues a forecast of the global surface temperature for the coming year. The forecast takes into account known contributing factors, such as solar effects, El Nino, greenhouse gases concentrations and other multi-decadal influences. Over the previous seven years, the Met Office forecast of annual global temperature has produced a mean forecast error size of just 0.06 degrees Celsius.

Met Office said it expects the global temperature for 2007 to be 0.54 degrees Celsius above the long-term 1961-1990 average of 14 degrees Celsius (57.2 degrees Fahrenheit), which would equate to a little north of 58 degrees Fahrenheit. The forecasting agency added that there is a 60% probability that 2007 will be as warm or warmer than the current warmest year (1998 was 0.52 degrees Celsius above the long-term 1961-1990 average).

Met Office said the potential for a record 2007 arises partly from a moderate-strength El Nino already established in the Pacific, which is expected to persist through the first few months of 2007. The forecasting firm noted that the lag between El Nino and the full global surface temperature response means that the warming effect of El Nino is extended and therefore has a greater influence on the global temperatures during the year.

“This new information represents another warning that climate change is happening around the world,” said Katie Hopkins from Met Office Consulting. “Our work in the climate change consultancy team applies Met Office research to help businesses mitigate against risk and adapt at a strategic level for success in the new environment.”

This Met Office global 2007 forecast follows news that 2006 was the warmest year on record across the United Kingdom. For the entire UK, 2006 was the warmest year on record with a mean temperature of 9.7 degrees Celsius (49.5 degrees Fahrenheit), which is 1.1 degrees Celsius above the 1971-2000 long-term average of 8.6 degrees Celsius (47.5 degrees Fahrenheit). Last year beat out 2003’s mean temperature of 9.5 degrees Celsius (49 degrees Fahrenheit).

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