Following an unusually warm winter that limited natural gas consumption and helped drive prices down and inventories to historic highs, spring and early summer are likely to bring a mixed weather bag, including mostly warmer-than-normal temperatures in the Northeast, according to forecasters at Andover, MA-based Weather Services International (WSI).
“After one of the warmest U.S. winters on record, characterized by a complete lack of impactful atmospheric blocking events, we are now in the midst of what will likely be one of the warmest months of March on record,” said WSI Chief Meteorologist Todd Crawford. “We expect the current warm pattern across much of the eastern two-thirds of the U.S. to retrogress westward as we head towards the end of March into early April, with a greater risk for cooler temperatures developing in parts of the eastern U.S., especially the Southeast.
“At this time, we feel that the late spring and early summer period will be generally characterized by a lack of significant atmospheric blocking, unlike the pattern we saw in 2008-2011. This pattern reversal, relative to the past few years, will favor more warmth across the northern U.S. as we head into summer, with near to slightly below-normal temperatures across those areas in the south-central and southeastern U.S. that have been very hot in recent summers.”
An expected return to El Nino conditions in the Pacific Ocean and the pattern of ocean temperatures in the North Pacific and North Atlantic basins indicate temperatures nationwide this summer could average cooler than the last two years, Crawford said. Temperatures will average warmer than normal in the Northeast, North Central, South Central and Southwest (except coastal southern California) in April, while cooler-than-normal temperatures are expected to dominate in the Southeast and Northwest, WSI said.
“As we enter the April shoulder period, weather-related demand becomes less important. But, with warmer weather across the northern tier of the country, there is less chance for late-season cold to increase demand for gas and power,” said Paul Flemming, Energy Security Analysis Inc. (ESAI) director of power and gas. “Mild temperatures and robust inventories (to begin the summer injection season) should keep natural gas prices soft through April. Generation maintenance will be in full swing during April and will be a greater driver in supporting power prices then weather. Gas demand will also be driven by maintenance due to outages for nuclear refueling and at coal plants. Power prices are likely to remain relatively soft in most regions due to the low-priced gas environment.”
The Northeast and South Central regions can expect a return to cooler-than-normal temperatures in May, leaving only the North Central and Southwest (except coastal southern California) in the warmer-than-normal column, according to WSI’s forecast.
“Slightly cooler-than-normal temperatures are expected in the eastern and southern regions which suggests that electric loads and gas demand will be moderate in the key Northeast markets and ERCOT [Electric Reliability Council of Texas],” Flemming said. “Planned generator maintenance will still be a factor during May, but the absence of early-season heat should keep prices moderate, particularly given the continued expectation for low gas prices.”
WSI expects a more encompassing warmup by early summer, with only the Southeast forecast to average cooler than normal in June. The Northeast, Central (except eastern Texas) and West are all expected to average warmer-than-normal.
“Natural gas demand should be near normal and much warmer-than-normal temperatures in the North Central region should not have any bullish impact on gas prices,” Flemming said. “Given the cooler outlook, the potential for early-season cooling demand in the Southeast and Texas is somewhat diminished.”
Working gas inventories continue to set new seasonal record highs due to unusually warm winter, with a total of 2,513 Bcf in storage at the end of February, 756 Bcf greater than last year’s level, according to the Energy Information Administration’s (EIA) Short-Term Energy Outlook for March (see NGI, March 12). EIA expects the heating season to end with inventories of more than 2,270 Bcf at the end of this month. That would be the highest end-of-March level on record, according to the agency.
Mild temperatures have dominated much of the country this winter, including the fourth-warmest January on record for the contiguous United States, according to AccuWeather.com (see NGI, Feb. 13). WSI is scheduled to issue its next seasonal outlook on April 24.
Â©Copyright 2012Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 1532-1266 |