WSI: Return of Cold Pattern in Big Gas-Demand Regions to Delay Dreams of Early Spring

Wild Winter Won’t Wane in March

ANDOVER, Mass. (February 24, 2014) — WSI (Weather Services International) has issued their forecast for spring (March-May) 2014, and expects below-normal temperatures across the northeastern quarter of the country, with above-normal temperatures elsewhere. The WSI seasonal outlooks reference a standard 30-year normal (1981-2010).

According to WSI Chief Meteorologist Dr. Todd Crawford: “After a brief respite from the cold winter pattern this week, all signs point to a return to a much colder pattern as we march towards March. The forcing from organized clusters of tropical thunderstorms in the west Pacific will likely return, resulting in another amplification of the jet stream in the east Pacific, and allowing for cold air to return to the northern and eastern US for March.

We expect the bulk of the above-normal temperatures to be confined to the drought-plagued Southwest for much of the spring, and we are monitoring the possible development of an El Nino event for clues to the upcoming summer forecast.”

In March, WSI sees the monthly breakdown as:

Northeast – Colder than normal
Southeast – Colder than normal, except Florida
North Central – Colder 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: “Natural gas prices are expected to be very firm in March. Coming on the heels of three colder-than-normal months, unseasonably cold temperatures in the Northeast and Midwest in March would draw natural gas inventories to the lowest level since 2004 (when inventories ended the withdrawal season at 1,014 Bcf). Regional gas prices in New England and New York should run exceptionally firm if the cold temperatures materialize as expected. PJM gas prices would also continue to carry a premium to Henry Hub despite the large year-over-year gains in Marcellus shale-gas production. Power and gas prices in Texas and California will likely be buoyed by firm Henry Hub prices in March but should be moderated by the warmer-than-normal temperatures and below-normal heating demand expected in those regions.“

In April, WSI forecasts:

Northeast – Colder than normal
Southeast – Warmer than normal
North Central – Colder than normal
South Central – Warmer than normal
Northwest – Warmer than normal
Southwest – Warmer than normal

Kostas added: “A mixed picture is developing for April with colder-than-normal temperatures centered over the Great Lakes Region but warmer-than-normal temperatures in the South and West. While weather-related demand is typically soft in April, colder-than-normal temperatures during the first week of the month could extend the withdrawal season into April and help to bolster gas prices during the first half of the month. The start of generator maintenance and low inventory levels should help to support natural-gas prices in April. Slack demand in the South and West should help to offset these bullish pressures and help to soften energy prices as the month progresses, however.”

In May, WSI forecasts:

Northeast – Warmer than normal
Southeast – Warmer than normal, except Florida
North Central – Colder than normal
South Central – Warmer than normal, except Gulf Coast regions
Northwest – Warmer than normal
Southwest – Warmer than normal

Kostas continued: “With slightly warmer-than-normal temperatures expected over much of the country in May, power and gas prices are likely to find continued fundamental support. Generation maintenance combined with slightly higher-than-normal electrical loads should help to support implied market heat-rates throughout the country but particularly in Texas where the cooling season starts earlier. Natural gas storage injections will likely run 2.0 to 2.5 Bcf/day over last year’s level; increasing year-over-year demand and directionally supporting prices. Increased natural gas production and higher year-over-year coal-fired generation should help to offset some of the increased demand and prevent prices from running to the upside, however.”

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 February 25.

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