WSI Expects a Cool Period across the Southeastern US, with Widespread, Above-Normal Temperatures in the Southwestern Central & Northeastern US

Northern US Heat Will Become More Intense and Widespread Later in Summer


Andover, MA, June 21, 2011 — WSI (Weather Services International) expects the upcoming summer period (July-September) to average cooler than normal in the southeastern US and Pacific Coast locales, with above-normal temperatures expected elsewhere, especially in the southwestern US. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000).

“The heat has built rather quickly this summer across most of the eastern two-thirds of the US,” said WSI Chief Meteorologist Dr. Todd Crawford. “The current high-latitude atmospheric blocking has resulted in a break from the heat across the northern tier of the country during the past week, but it appears that this blocking will wane as we head further into summer. As this occurs, the heat will become more favored across the northern US. We also feel strongly that the southwestern US will be quite hot for the remainder of the summer, but are less confident in building heat across the rest of the West. As the heat builds north, the Southeast may see a cooler, rainier pattern develop as low-level tropical easterly winds become established earlier than normal. For the July-September period as a whole, we are forecasting 824 population-weighted cooling-degree days, higher than the 1971-2000 average of 766, but lower than last year’s extreme value of 937.”

In July, WSI predicts regional temperature anomalies as follows:

Northeast* – Warmer than normal
Southeast* – Cooler than normal
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 10.9% below last year’s level to start the summer, the forecast for warmer-than-normal temperatures over most of the country in July will not leave much opportunity for injections to close the year-over-year gap. Cooler-than-normal temperatures expected along the Pacific Coast and the Southeast should offset some of the bullish underpinnings expected from the rest of the country; but they are unlikely to offset enough to make up the deficit to last year. Increased gas demand from ERCOT, MISO, NY, New England and northern PJM should keep natural gas prices firm despite year-over-year increases in gas production,” Kostas added. “Implied market heat rates and power prices are also likely to be firm in those power pools as a result of the heat with the largest effects likely to be felt in ERCOT.”

In August, WSI sees the monthly breakdown as:

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

“Natural gas prices are likely to be firm in August considering the warmer-than-normal temperatures that are expected to engulf most of the country. With the Southeast expected to be the only cooler-than-normal region, aggregate natural gas demand should remain firm. Implied market heat rates and power prices in ERCOT, PJM-East, New York and New England should run high in August, as increased power demand pushes prices up the supply curve. The large spread between gas and oil could send power prices soaring in load pockets of eastern PJM and New York City, even if oil-fired generation is called on for a limited number of hours during the month. California may experience a marked increase in power prices between July and August as temperatures shift from cooler than normal to warmer than normal and seasonal hydro production tapers off,” added Kostas.

In September, WSI forecasts:

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

Kostas further noted, “With much-warmer-than-normal temperatures expected in ERCOT, MISO, PJM, NY and New England in September, lingering cooling demand and the onset of the generation maintenance period should keep gas demand firm. Implied market heat rates and power prices are also likely to be firm on the late-season cooling demand. Although we expect inventory levels to make their way toward 3,800 Bcf by the end of the injection season, natural gas prices are unlikely to collapse in September due to the much-warmer-than-normal temperatures that are expected this summer. California power prices will likely experience relief from the higher prices of August, however, as cooler-than-normal temperatures hit the West Coast in September. Cooler-than-normal temperatures are also expected in the Southeast and should also have a bearish effect on Florida power prices.”

WSI, which provides customized weather information to energy traders, will issue its next seasonal outlook on July 26.

*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