WSI Calls for Cold February and March in the Eastern US

WSI and ESAI Predict Significant Increase in Total February-April Energy Usage Year-Over-Year, Reducing Gas Inventories

Andover, MA, January 21, 2010 — WSI expects the upcoming period (February-April) to average cooler than normal in the eastern two-thirds of the US, with warmer temperatures in the western US, especially in March/April. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).

“After a brief respite from the bitter cold in late January, this rather extreme winter appears to be gearing up for an encore in February” said WSI Chief Meteorologist Dr. Todd Crawford. “All of the important weather and climate factors that we monitor suggest winter will be coming back with a vengeance in February. This transition back to colder temperatures is already showing up in two-week forecasts from our computer models, lending more confidence to the colder forecast trend. For the February-April period as a whole, we are forecasting 1863 gas-weighted heating degree days on a national basis, which is approximately 8% more than last year and about 2% more than the 1971-2000 mean.”

In February, WSI predicts regional temperature anomalies as follows:

Northeast – Colder than normal
Southeast – Colder than normal
N Central – Colder than normal
S Central – Colder than normal
Northwest – Colder than normal
Southwest – Colder than normal

“The WSI February forecast shows cooler-than-normal temperatures across the entire country with significantly colder temperatures expected in the North Central, Rockies and Southeast regions,” said Paul Flemming, Director of Power & Gas at ESAI, “Natural gas demand will be strong with particularly high demand from the North Central states, which depend more heavily on gas for heating than in the Northeast. Delivered gas prices in the constrained areas of the Northeast markets should see more volatility with cooler temperatures. Given the strong gas demand expectations, we expect to see some significant inventory draws in February. Electric loads will be at the high end of expectations and power prices will be impacted by higher delivered gas prices in the eastern markets.”

In March, WSI sees the monthly breakdown as:

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

“For March, WSI is forecasting colder-than-normal temperatures east of the Mississippi and warmer temperatures in the western regions. Natural gas demand is likely to be slightly above-average as lower demand in the warmer western regions offsets strong demand in the east. Power prices in the east will continue to be responsive to delivered gas prices, but lower loads in March will moderate prices.” said Paul Flemming. “The thing to watch for in the March power markets will be the start of the maintenance season with nuclear outages commencing in many areas. The nuclear outages will further add to late season gas demand.”

In April, WSI forecasts:

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

“In April, WSI is forecasting significantly warmer-than-normal temperatures across the western regions but generally cooler temperatures east of the Mississippi. In April, gas demand will be moderate as the heating season draws to a close. Cooler temperatures in the Northeast will be slightly bullish for electric loads, but generator maintenance schedules will play a more bullish role in power markets than changes in weather patterns,” said to Paul Flemming.

WSI, which provides customized weather information to energy traders, will issue its next seasonal outlook (for the March-June period) on February 23.

About WSI

WSI Corporation is the world's leading provider of weather-driven business solutions for professionals in the energy, agriculture, insurance, 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. More information about WSI can be found at www.wsi.com.

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.

Linda Maynard

WSI
(978) 983-6715
lmaynard@wsi.com

Tommy Sutro

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

Editorial Contact:
 

Barbara Rudolph

Rudolph Communications, LLC
(781) 229-1811
bjr@rudolphcommunications.com