WSI Energycast Outlook Calls for Continuation of Warm Temperatures in the East in September
WSI and ESAI issue an update of special interest to energy traders
Andover, MA, August 21, 2007 - WSI Corporation issued the seasonal outlook for the upcoming three-month period (September-November) August 14. WSI expects the upcoming three-month period to average warmer than normal in all locations except for the northwestern quarter of the country. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
The monthly breakdown follows:
In September:
- Northeast - Warmer than normal
- Southeast -Warmer than normal
- N Central - Cooler than normal
- S Central - Warmer than normal
- Northwest - Cooler than normal
- Southwest - Warmer than normal
Expected Market Impact (provided by ESAI)
The WSI September forecast indicates warmer-than-normal temperatures across
much of the country with cooler-than-normal temperatures expected in the
Northwest and North Central Regions. The warmer outlook in most regions
will increase the probability of late-season heat events and higher power
prices. This would be marginally bullish for natural gas demand and prices.
Overall, September natural gas demand from the power sector should be
neutral to slightly bullish for gas prices. High gas inventories should
outweigh any bullish demand pulls from the power sector.
In October:
- Northeast - Cooler than normal, except PA/NJ
- Southeast - Warmer than normal
- N Central - Cooler than normal
- S Central - Warmer than normal, except OK
- Northwest - Cooler than normal
- Southwest - Warmer than normal, especially AZ/NM
Expected Market Impact (provided by
ESAI)
The WSI October forecast indicates slightly cooler-than-normal temperatures
across the northern tier of the country. Early-season heating demand for
gas could be slightly higher-than-normal with the cooler outlook in the
northern tier. Power demand will be moderate due to shoulder-season temperatures.
In the Northeast, fall generator maintenance programs are low and there
are no scheduled nuclear outages in New York or New England. With moderate
temperatures and low generator outages, gas demand from the power sector
in the Northeast will be moderate.
In November:
- Northeast - Warmer than normal
- Southeast - Warmer than normal
- N Central - Colder than normal, except IA/NE
- S Central - Warmer than normal, except west TX
- Northwest -Colder than normal
- Southwest - Colder than normal
Effects in the Marketplace (provided
by ESAI)
The WSI November forecast indicates colder-than-normal temperatures across
the North Central and Western regions. With the key upper-Midwest and
Northeast heating demand regions expecting warmer-than-normal temperatures,
the November heating season may get off to a slow start. Lower demand
in November could allow more time for inventories to approach maximum
levels, eliminating any concerns over supply shortages over the winter
and providing a bearish start to winter gas prices. Planned generator
maintenance will have more sway over power prices in November than fluctuations
in temperatures during this shoulder month.
According to WSI seasonal forecaster Dr. Todd Crawford, “The transition to warm temperatures in the East in August should persist into September, as coastal ocean temperatures have warmed considerably, relative to normal, and as a pattern characteristic of La Nina becomes more firmly entrenched. This means that the focus of cooler temperatures should shift to the northwestern and north-central states during the next couple of months. There are rather striking similarities between current global atmospheric/oceanic patterns and those in late summer of 1996. That year was characterized by a very cool fall in many locations, especially the north-central states.”
WSI, which provides customized weather information to energy traders, issues its seasonal outlook twice-monthly. An update to the current forecast will be issued to clients on August 30, with the next new forecast package (for October-December) issued on September 18.
About WSI Corporation
WSI Corporation is the world's leading provider of weather-driven business solutions
for professionals in the energy, aviation, and media markets, and multiple federal
and state government agencies. WSI is headquartered in Andover, Massachusetts
with offices in Birmingham, England, and is a wholly owned subsidiary of Landmark
Communications. More information about WSI can be found at www.wsi.com.
About ESAI Corporation
Since its inception in 1984, Energy Security Analysis Inc. (ESAI) has been dedicated
to monitoring, analyzing, and synthesizing information about world-wide energy
markets. Tapping the talents of its senior-level staff, ESAI provides clients
with unparalleled insight into where the markets have been and where they are
headed. ESAI provides ongoing systematic analysis of energy prices in the oil,
natural gas, and energy markets. For more information on ESAI services visit
www.esai.com
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