WSI: After a Mild December, Colder Pattern to Take Hold in Eastern US

Colder Pattern Right on Schedule to Ring in New Year

ANDOVER, Mass. (December 19, 2014) — WSI (Weather Services International) has issued their latest forecast for the January-March period. The forecast indicates below-normal temperatures will be generally prevalent in the eastern half of the US, with above-normal temperatures expected in the western US. The WSI seasonal outlooks reference a standard 30-year normal (1981-2010).

According to WSI Chief Meteorologist Dr. Todd Crawford: “The El Nino event flexed its muscle a bit in December, with a howling Pacific jet responsible for much-needed rain in California and record warmth across parts of the northern US. As we head towards the end of 2014, however, big changes are in store again as the cold air factory at the North Pole will turn its cannons back towards to North America again. There is some question about how long the cold pattern will last, since the sub-seasonal signals suggest a similar evolution to what we’ve seen in December, with very cold temperatures early followed by warmer temperatures later in the month. We expect the western US, after a cold start to the month, to become much warmer later in the month, with the eastern US bearing the brunt of the cold for the remainder of the month. There is still no sign of any significant stratospheric disturbance that would increase the odds for severe and widespread cold later in the winter, but it is still a bit early for such an event and we will continue to monitor developments.”

In January, WSI sees the monthly breakdown as:
Northeast – Colder than normal
Southeast – Colder 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: “Natural-gas prices could get a minor boost in January due to a shift to colder temperatures in the population-rich eastern half of the country. With slightly colder-than-normal temperatures expected east of the Mississippi, natural-gas prices in the Northeast will likely firm from December’s relatively subdued levels. Slightly firmer natural-gas prices are also likely to be seen at Henry Hub, though with the gains seen in the Marcellus region and pipeline expansions that have occurred this year the price effects of cold temperatures in the Northeast will be muted. Also helping to offset the price effects of slightly colder-than-normal temperatures in the East, will be the relatively warmer-than-normal temperatures that are expected in the West. Although slightly colder-than-normal January temperatures are expected in many of the same regions that experienced frigid temperatures last January, production gains and pipeline expansions over the summer have improved supply availability and should prevent a recurrence of the volatile price behavior seen last year. While natural-gas prices in New England are expected to be strong in January, a slightly larger winter reliability program this year will combine with much lower fuel-oil prices to temper some of the region’s gas-price volatility.”

In February, WSI forecasts:
Northeast – Colder than normal
Southeast – Colder than normal
North Central – Warmer than normal west, colder than normal east
South Central – Colder than normal
Northwest – Warmer than normal
Southwest – Warmer than normal

Kostas added: “With much colder-than-normal temperatures expected over the East Coast, demand centers like New York City and pipeline-constrained regions like New England could see natural-gas price strength in February. With WSI forecasts for colder-than-normal February temperatures over much of the eastern portion of the country, natural-gas inventory withdrawals could be above average, which would also support prices. Mild temperatures in December have helped inventories greatly, however, with the most recent EIA inventory report indicating mid-December inventories finally above last year’s level. This marks the first week since last winter that inventories have exceeded year-ago levels. Inventories are still 7.3% below the 5-year average, however. Significant gains in year-over-year production levels (production is 5 Bcf/day higher than last year), should help to temper the cold weather and keep Henry Hub prices in check.”

In March, WSI forecasts:
Northeast – Colder than normal south, warmer than normal north
Southeast – Colder than normal
North Central – Warmer than normal
South Central – Colder than normal
Northwest – Warmer than normal
Southwest – Warmer than normal

Kostas noted: “Colder-than-normal temperatures in the Midwest and Gulf states should be offset by warmer-than-normal temperatures elsewhere to keep natural-gas prices under wraps in March. Heating demand typically fades quickly during the second half of the month and should help to keep monthly-average gas prices subdued in most regions. We expect daily Marcellus-gas prices will turn negative by the end of the month at many Midwest delivery points even if monthly average temperatures are slightly colder-than-normal in the region.”

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 January 16.

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