Adding another opinion to the muddled winter forecast scene, Andover, MA-based WSI Corp. said Monday that it expects the November-through-January period to average cooler-than-normal temperatures in the major cities of the Northeast and parts of the southern Rockies and Southwest, while warmer-than-normal temperatures are expected across the rest of the northern U.S. and in the Southeast.
So far, forecasts this winter have been all over the map. While the 2007 Farmers’ Almanac predicts a cold 2006-2007 winter from coast to coast for the U.S. (see Daily GPI, Aug. 31), EarthSat Energy Weather and the National Oceanic and Atmospheric Administration (NOAA) expect the season to be colder than last year but warmer than normal (see Daily GPI, Oct. 17). AccuWeather said last week that it expects it to be colder than normal along the high-energy-demand East Coast and eastern Gulf Coast, but warmer than normal from the western Great Lakes to the Pacific Northwest (see Daily GPI, Oct. 19).
“The current El Nino event may become centered more in the eastern tropical Pacific rather than near the dateline, as was the case in the cold eastern winters of 2002-03 and 2004-05,” said WSI seasonal forecaster Todd Crawford. “If the more eastern scenario pans out, chances for a cold eastern winter decrease. Further, the rate of snow cover build-up at higher latitudes will also impact the chances for cold weather in the East, with a faster snow cover build increasing the chances for cold. Although uncertainty is still rather high at this point, we currently feel that the best chances for cold weather in the major population centers in the East will be in December, with a very warm late-winter period expected.”
Looking at the monthly breakdown, WSI said it expects November to bring warmer-than-normal temperatures to Northeast and North Central portions of the country, while the rest of the United States experiences cooler-than-normal conditions, with the exceptions of Kansas, Oklahoma, Idaho, Montana, Wyoming, Nevada, Utah and Colorado.
In analyzing WSI’s forecast for the month, Wakefield, MA-based Energy Security Analysis Inc. (ESAI) said warmer-than-normal temperatures in the North Central and Northeast region will set the pace for natural gas demand as the market shifts from injections to withdrawals from storage. “Warmer weather in November may extend the injection season and put additional pressure on physical gas prices as there is little room for excess gas due to the extremely full storage, expected at 3.5 to 3.6 Tcf by early November,” ESAI said. “Cooler-than-normal temperatures in the Southern and Western regions will have less impact on natural gas demand and prices. Planned generator maintenance will decline in most regions during November and the warmer weather outlook in the Northeast will be bearish for power prices there.”
Moving into December, WSI said it anticipates warmer-than-normal conditions for the entire U.S. with the exception of the key Northeast region, which is forecasted to be cooler than normal.
“A colder December in the Northeast will be bullish for natural gas demand, but this will be largely offset by warmer temperature expectations in all other regions,” ESAI said. “Combined with the very high start-of-season natural gas inventories, the generally warmer December outlook should be moderately bearish for natural gas prices. Power prices in the Northeast will be slightly bullish under the cooler-than-normal December forecast, however, a moderate gas price environment will keep power prices from escalating.”
WSI said that December’s temperatures will roll over into January, where the majority of the country will remain warmer than normal, while the Northeast remains chilly.
ESAI said that higher gas demand from the Northeast will not be enough to offset moderate demand from other areas, noting that warmer temperatures in most regions — particularly the North Central region — will be bearish for natural gas prices this winter. “With overall temperature expectations being warmer than normal in December and January, and with maximum storage levels to start the season, natural gas prices should not see major price spikes due to expectations of shortages towards the end of the heating season,” ESAI said. “Power prices in the Northeast will be bullish due to increases in natural gas prices to Northeast delivery points.”
WSI said it will release an update to the current forecast on Oct. 27, with the next new forecast package (for December-February) issued on Nov. 14.
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