WSI: Summer Heat to Persist in the Western US in August, With Rainy Tropical Pattern in the Southeast

More Variability Expected in Texas, Northern Plains, Northeast Next Month

ANDOVER, Mass. (July 23, 2013) — WSI (Weather Services International) expects the upcoming period (August-October) to be cooler than normal across the Southeast with above-normal temperatures elsewhere, particularly across parts of Texas and the Northeast. The WSI seasonal outlooks reference a standard 30-year normal (1981-2010).

According to WSI Chief Meteorologist Dr. Todd Crawford: “The summer has been quite hot so far across much of the western US, with temperatures near or below normal across much the Midwest, Ohio Valley, and the Southeast. As we head into August, we expect this general trend to persist, with the most significant and consistent heat found in parts of the West. The Southeast US has the best chance to see extended periods of rain and below-normal temperatures, while the Plains, Midwest, and Northeast will likely see more variability, with aggregate monthly temperatures slightly above normal. As we head towards fall, we are monitoring the possible development of a weak El Nino event, which would increase the chances for cooler-than-normal temperatures and an early start to the heating-demand season across the eastern US. At this time, we are not particularly bullish on an El Nino event developing, and our current forecast through October is for generally mild conditions across the major heating demand centers of the eastern US.”

In August, WSI sees the monthly breakdown as:
Northeast – Warmer than normal
Southeast – Cooler than normal
North Central  – Warmer than normal
South Central – Warmer than normal
Northwest – Warmer than normal
Southwest – Warmer than normal

According to Chris Kostas, Senior Power and Gas Analyst at ESAI Power LLC: “Power prices and implied market heat-rates will likely find strength in many parts of the country through mid-August. California, in particular, could be at risk for sustained higher prices in August as hydro generation tapers off and temperatures remain high. ERCOT, MISO, PJM, NYISO, and NEISO power prices should also see strength particularly during the first half of August considering the warmer-than-normal temperatures expected in those regions. Firm gas prices and increased electrical loads should also help to boost coal-fired generation throughout the country and will help to moderate the upward pressure on implied market heat-rates, however. Price volatility should taper off by the second half of August as seasonal norms decline. Mild August temperatures in the Southeast should help to moderate power prices in that region.”

In September, WSI forecasts:
Northeast – Warmer than normal
Southeast – Cooler than normal
North Central – Warmer than normal
South Central – Warmer than normal
Northwest – Warmer than normal
Southwest – Warmer than normal

Kostas added: “Firm power prices expected this summer due to above-normal temperatures could extend into September, particularly in California and Texas. Although electrical loads begin to decline as average temperatures decrease, above-normal temperatures in California and Texas should help to extend firm summer power prices into September. Cooling loads in PJM, NYISO, and NEISO decline precipitously in September. However, warmer-than-normal September temperatures expected in those regions could help to support power prices particularly as the generation maintenance season begins. Florida, which is expected to be spared from warmer-than-normal temperatures this summer, may make it through September without any meaningful price excursions.”

In October, WSI forecasts:
Northeast – Warmer than normal
Southeast – Warmer than normal
North Central – Cooler than normal
South Central – Warmer than normal
Northwest – Cooler than normal
Southwest – Warmer than normal

Kostas continued: “Weather-related energy demand is generally very soft in October. New England can buck the trend as seasonal norms begin to fall, but with mild temperatures expected in the region delivered natural-gas prices may remain soft (especially if Canadian imports increase as expected due to new production at Deep Panuke). Texas could see continued strength in implied market heat-rates as nuclear and coal-fired generators complete maintenance. Although heating and cooling demand will be relatively soft in October, natural-gas prices may be supported through the end of the month due to increased year-over-year injection demand. Inventories were drawn well below last year’s level to begin the injection season and we expect that a hefty year-over-year increase in injection demand (i.e. 4.0 Bcf/day) will be required through the end of October to make up the deficit.”

WSI provides customized weather information to global commodity traders via its industry-leading WSI Trader Web site. WSI will issue its next seasonal outlook on August 20.

About WSI Corporation
WSI (Weather Services International) and Weather Central are the world's leading providers of weather-driven business solutions for professionals in the energy, aviation, insurance and media markets, as well as multiple federal and state government agencies. Together they comprise the professional division of The Weather Company and are owned by a consortium made up of NBC Universal and the private equity firms, The Blackstone Group and Bain Capital.

About ESAI
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, see www.esai.com.

Media Contacts:
Linda Maynard, WSI
(978) 983-6715, lmaynard@wsi.com

Tommy Sutro, Energy Security Analysis, Inc.
(781) 245-2036, tsutro@esai.com