WSI Expects a Warm Fall Season, Especially in Northern US

Increasing Chances of Below-Normal Temperatures in Eastern and Central US by November/December


Andover, MA, August 23, 2011 — WSI (Weather Services International) expects the upcoming fall period (September-November) to average cooler than normal in the Pacific Coast states and parts of the Southeast, with significantly above-normal temperatures expected elsewhere, especially across the northern Plains and northern Rockies. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000). Beginning in September, WSI will reference the 1981-2010 normals, which are generally warmer than the 1971-2000 normals.

“While the oppressive summer heat has at least temporarily broken across much of the northern US, we do expect a return to more persistent above-normal temperatures as we head into the fall season,” said WSI Chief Meteorologist Dr. Todd Crawford. “The fall pattern will generally be driven by the very strong northern Pacific Ocean signal, with significant positive ocean temperature anomalies surrounded by negative ocean temperature anomalies. This particular setup, known as the negative phase of the Pacific Decadal Oscillation, typically changes the downstream atmospheric pattern to favor very warm temperatures across the north-central and northeastern US for much of the fall season. As we near the end of fall, however, we feel that there are increasing chances for below-normal temperatures across the central and eastern US, as atmospheric blocking re-emerges.”

In September, WSI sees the monthly breakdown as:

Northeast* – Warmer than normal
Southeast * – Warmer than normal, except Florida
N Central* – Warmer than normal
S Central* – Warmer than normal
Northwest* – Cooler than normal
Southwest* – Warmer than normal, except coastal CA

According to Chris Kostas, Senior Power and Gas Analyst at ESAI, “With natural gas inventories running 6.6% below last year’s level (and 2.8% below the 5-year average) through mid-August, the forecast for warmer-than-normal temperatures over most of the country in September will make it difficult for gas inventories to close the gap and set another new storage record this year. Cooler-than-normal temperatures expected along the Pacific Coast and in Florida won’t be enough to offset the price-supportive underpinnings expected from the rest of the country. In addition, above-normal cooling demand and the beginning of the generation maintenance season in ERCOT, MISO, New York, New England and PJM should combine to keep natural gas prices from collapsing below $3.50/MMBtu this year. (This is despite the huge increase in year-over-year gas production). While power prices are likely to be relatively soft due to lower fuel costs in September, implied market heat rates are likely to remain firm in those power pools as a result of the slightly above-normal cooling demand.”

In October, WSI forecasts:

Northeast – Warmer than normal
Southeast – Warmer than normal, except Florida
N Central – Warmer than normal
S Central – Warmer than normal
Northwest – Cooler than normal
Southwest – Warmer than normal, except coastal CA

Kostas further noted, “While cooling demand tapers off significantly in October, the generator maintenance period takes a great deal of coal and nuclear generation offline, leaving natural-gas-fired generators to fill in the gap. With warmer-than-normal temperatures expected in ERCOT, MISO, PJM, New York and New England in October, above-normal seasonal power demand and the continuation of the generation maintenance period should keep demand firm and gas prices from collapsing, as the injection season comes to an end. Implied market heat rates are likely to remain relatively firm in those regions due to the marginal late-season cooling demand. With temperatures expected to be warmer-than-normal in September and October through most of the country, we expect gas inventory levels to have trouble challenging last year’s record of 3,840 Bcf by the end of the injection season. Our current end-of-season storage forecast currently stands at 3,650 Bcf. With cooler-than-normal temperatures expected in California and Florida, implied market heat rates and power prices should be stable and subdued in those regions in October.”

In November, WSI forecasts:

Northeast – Warmer than normal
Southeast – Colder than normal
N Central – Warmer than normal
S Central – Warmer than normal, except TX
Northwest – Warmer than normal
Southwest – Warmer than normal

Kostas added, “In November, heating demand begins to pick up in the Consuming East (i.e. Northeast, Mid-Atlantic, and Mid-West). With warmer-than-normal temperatures expected throughout the region this year, however, heating demand for gas will likely run slightly below normal. Henry Hub natural gas prices can be expected to pick up slightly from October shoulder season levels, however, as winter heating demand begins. As we enter the winter heating season, we expect that gas prices could also be supported by inventory levels that are slightly lower than those of last year. Power prices and heat rates are likely to be soft in Florida and the Southeast as a result of the cooler-than-normal temperatures expected there.”

WSI, which provides customized weather information to energy traders, will issue its next seasonal outlook on September 20.

*To view the map defining WSI’s US regions, click here.

About WSI
WSI (Weather Services International) 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 a member of The Weather Channel Companies and is headquartered in Andover, Massachusetts with offices in Birmingham, England. The Weather Channel Companies 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.

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

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

Editorial Contact:
Barbara Rudolph
Rudolph Communications, LLC
(781) 229-1811
bjr@rudolphcommunications.com