The moderate weather that has so far been the calling card of this winter will give way to lower temperatures, with colder-than-normal temperatures dominating the nation’s northern tier beginning in February, according to forecasters at Andover, MA-based Weather Services International (WSI).
WSI’s three-month forecast calls for a 2.4% reduction in heating demand compared with last winter, but a 5.2% increase relative to 1981-2010 averages, according to WSI Chief Meteorologist Todd Crawford.
“So far, the heating season has been the mildest since 2006-07 across the major energy demand centers of the U.S., as a very strong polar vortex has kept most of the significant and sustained cold out of the eastern U.S.,” Crawford said. “This regime has now ended as the polar vortex has weakened significantly. For this reason, the last half of winter and early spring will likely be much different than the first half of winter. Further, the first significant episode of North Atlantic blocking (negative NAO pattern) is expected to develop as we head into February, allowing for more widespread, below-normal temperatures in the U.S.
“While the current moderate La Nina event has already begun to wane and hasn’t yet produced the expected impacts on U.S. weather patterns so far this winter, we still think that the weaker polar vortex will allow for more typical, late-winter, La Nina impacts to manifest going forward. Specifically, this favors below-normal temperatures across the northern and western U.S. and above-normal temperatures across the Southeast. For the February-April aggregate period, we think that below-normal temperatures will occur north of a Phoenix-Washington, DC, line.”
Chesapeake Energy Corp. CEO Aubrey McClendon last Monday said “an exceptionally mild winter,” which has pressured U.S. gas prices “to levels below our prior expectations and below levels that are economically attractive for developing dry gas plays in the U.S.,” is part of the reason his company plans to curtail 0.5 Bcf/d, or 8%, of its current operated gross gas output, which is 6.3 Bcf/d — 9% of the nation’s estimated gas production (see related story).
WSI expects temperatures to average colder than normal across the northern tier, and warmer than normal across the southern tier, in February and March.
“Although colder temperatures across the northern part of the country will increase gas demand, any price response will be tepid due to high inventories and continued high production,” said Paul Flemming, Energy Security Analysis Inc. (ESAI) director of power and gas. “Power prices in the Northeast will be low as a result of lower gas prices. Increased loads in February are possible due to the higher likelihood of cold snaps. This outcome would be bullish for delivered gas prices and power prices in the Northeast and Midwest markets. Warmer weather in Texas will be slightly bearish for loads and power prices there.”
With the temperature map virtually unchanged in March, gas prices are expected to remain low, but power prices could rally at times, Flemming said.
“These rallies would be due to the higher loads associated with late-winter cold combined with an early start to the generator maintenance season this year. There are planned nuclear outages in March in both PJM and New York. Warmer weather across the southern states should be neutral for power prices in Texas and Florida with shoulder-period load levels in those regions.”
Warmer-than-normal temperatures will be in place in the Northeast, Southeast and South Central areas (except west Texas) in April, while colder-than-normal temperatures are expected in the North Central, Northwest and Southwest.
“Lower gas demand for heating in April will be offset, somewhat, by the increased need for gas from the power sector, as gas plants make up for coal and nuclear outages,” Flemming added.
WSI is scheduled to issue its next seasonal outlook on Feb. 21.
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