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WSI: Threat of Cooler Temperatures Increasing as Summer Progresses in the North-Central and Northeast

Hottest Temperatures to Become More Focused Across Western US

ANDOVER, MA--(Marketwired - June 23, 2014) - WSI (Weather Services International) has issued their latest forecast for the July-September period. The forecast indicates below-normal temperatures will be prevalent across the north-central and northeastern states, along with the Rockies. The most significant negative temperature anomalies will be found across the northern Plains and northern Rockies. Above-normal temperatures are expected in the Southeast US and western states. The most significant heat, relative to normal, is expected across the Pacific Northwest. The WSI seasonal outlooks reference a standard 30-year normal (1981-2010). 

According to WSI Chief Meteorologist Dr. Todd Crawford: "To date, the summer pattern has consisted of southwestern heat, cool temperatures across the northern Rockies and northern Plains, and alternating warm and cool spells across the southern Plains and the East. Our latest forecast models suggest that this general pattern will persist through the summer, with increasing odds of below-normal temperatures across the north-central and northeastern US, and better chances of above-normal temperatures across the Pacific Northwest. The atmospheric forcing from the tropical Pacific suggests that cooler risks may rule the day across the north-central/northeastern US by later in July as the next push towards El Nino conditions occur in the tropics."

In July, WSI sees the monthly breakdown as:

Northeast* - Cooler than normal
Southeast* - Warmer than normal
North Central * - Cooler than normal
South Central* - Warmer than normal
Northwest* - Warmer than normal
Southwest* - Cooler than normal

According to Chris Kostas, Senior Power & Gas Analyst at ESAI Power LLC: "Aggregate North American natural-gas demand in July is expected to run below normal due to the cooler-than-normal temperatures that are expected over most of the country. These mild summer temperatures should result in relatively soft energy prices, particularly in the Northeast and Midwest markets. Natural gas prices in the Northeast and Midwest will continue to see significant discounts to Henry Hub due to mild weather demand and continued production growth from Marcellus shale gas region. Robust natural-gas injections should help offset some of the Northeast price weakness and allow storage levels to improve relative to last year, however. In California and eastern Texas, slightly warmer-than-normal July temperatures should help support power prices. Slightly warmer-than-normal temperatures in the South should also help to support Henry Hub prices relative to the shale production region of Pennsylvania."

In August, WSI forecasts:

Northeast - Cooler than normal
Southeast - Warmer than normal
North Central - Cooler than normal
South Central - Warmer than normal
Northwest - Warmer than normal
Southwest - Cooler than normal

Kostas added: "In August, cooler-than-normal PJM and MISO temperatures should help keep power prices and implied market heat-rates relatively soft. Natural-gas prices in the Northeast and Mid-Atlantic region will continue to run soft relative to Henry Hub due to below-normal electrical loads in those regions. Reduced aggregate cooling demand and lower electrical loads should also allow natural-gas inventories to reduce the deficit to last year's level. In Texas, warmer-than-normal August temperatures should help to firm ERCOT power prices and implied market heat-rates."

In September, WSI forecasts:

Northeast - Warmer than normal
Southeast - Warmer than normal
North Central - Cooler than normal
South Central - Cooler than normal
Northwest - Warmer than normal
Southwest - Cooler than normal

Kostas noted: "In September, continued mild Midwest temperatures should help natural-gas inventories close the deficit to last year's storage levels. We expect generally mild temperatures across the Consuming East region this summer will allow natural-gas inventories to recover from the very large drawdown this past winter. Firm power prices resulting from warmer-than-normal temperatures are possible in northern California, eastern Texas and across the South. Warmer-than-normal temperatures in the South and cooler-than-normal temperatures in the Midwest could also help keep Henry Hub prices firm relative to Marcellus price points."

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 July 18. 

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

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.

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