WSI Energycast Outlook Calls for Warmth to Continue in East for November-January Period
WSI and ESAI issue an update of special interest to energy traders
Andover, MA, October 23, 2007 - WSI Corporation issued the seasonal outlook for the upcoming three-month period (November-January) on October 16. WSI expects the upcoming three-month period to average warmer than normal in all locations except for parts of the northern Rockies, northern Plains, and extreme northern New England. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).
The monthly breakdown follows:
In November:
- Northeast - Warmer than normal
- Southeast -Colder than normal
- N Central - Warmer than normal
- S Central - Colder than normal, except KS/OK
- Northwest - Warmer than normal, WA/OR
- Southwest - Warmer than normal, except CA
Expected Market Impact (provided by ESAI)
The WSI November forecast indicates warmer than normal temperatures across
the entire northern tier of the country, except Washington and Oregon.
This will delay early season heating demand for gas and should extend
the injection period for natural gas into storage. This increases the
likelihood that inventories will reach maximum levels during November,
easing whatever concerns might be left about the winter availability of
gas. Power demand will be moderate due to shoulder-season temperatures
and prices will be influenced early in the month by continuing generator
maintenance.
In December:
- Northeast - Colder than normal
- Southeast - Colder than normal, except FL/MS/AL
- N Central - Colder than normal
- S Central - Warmer than normal
- Northwest - Warmer than normal, except ID/MT/WY
- Southwest - Warmer than normal
Expected Market Impact (provided by
ESAI)
The WSI December forecast indicates colder than normal temperatures across
the Northern and Eastern regions of the country, particularly in the North
Central region. Cold weather across all the major heating demand areas
in December should be bullish for gas prices, however, supply concerns
are likely to be moderated by high natural gas inventories at the start
of the heating season in mid-November. Power prices are likely to be influenced
more by gas price increases than through increased load induced by cold
weather.
In January:
- Northeast - Warmer than normal, except ME
- Southeast - Warmer than normal
- N Central - Warmer than normal, except ND/MN
- S Central - Warmer than normal
- Northwest -Colder than normal
- Southwest - Warmer than normal, except CA
Effects in the Marketplace (provided
by ESAI)
The WSI January forecast indicates warmer-than-normal temperatures in
the Northeast and much warmer-than-normal in the Southeast. Warmer temperatures
in January would tend to decrease the chances for extended cold snaps
which would provide price volatility in natural gas, however, the La Nina
event could bring occasional shorter periods of very cold weather. Natural
gas demand should be below-normal given the generally warmer profile across
most regions. The west coast outlook is colder than normal, but increased
gas demand from that region is not likely to offset the lower demand from
other regions.
According to WSI seasonal forecaster Dr. Todd Crawford, “This La Nina event has strengthened quite substantially over the last month, and is now in the upper end of the moderate category, with the potential to end up being a full-fledged strong event. As the atmosphere transitions to the more energetic winter pattern, we may get a few weeks of cold weather in the East during the next couple of months. Indications are that late winter may be quite warm, however, especially in the Southeast. The Northeast will likely be warm on average as well, however, there will likely be occasional spells of very cold weather due to the proximity of colder-than-normal temperatures in southeastern Canada. This will limit the magnitude of the above-normal temperature anomalies for the entire winter period.”
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 October 25, with the next new forecast package (for December-February) issued on November 13
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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