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ANDOVER, Mass., Nov 22, 2005 -- BUSINESS WIRE
WSI Corporation today issued the seasonal outlook for the upcoming three-month period (December-February). WSI expects this period to average cooler-than-normal across the northern tier of states and along the Pacific Coast with warmer-than-normal temperatures elsewhere. The WSI seasonal outlooks reference a standard 30-year normal (1971-2000). In December: Northeast - Warmer than normal Southeast - Warmer than normal N Central - Cooler than normal, except for NE/IA S Central - Warmer than normal, especially TX/OK Northwest - Cooler than normal, except WA/OR Southwest - Warmer than normal, except for CA Expected Market Impact (provided by ESAI) The WSI December forecast indicates warmer-than-normal temperatures in the eastern U.S., South Central and Southwest regions. Cooler than normal temperatures in most of the North Central regions will increase natural gas demand for heating in these areas. This increase in demand will be largely offset by lower demand in the Northeast. By December, it is likely that 2.5-3.0 Bcf/day of Gulf production will still be shut-in. The warmer weather over most parts of the U.S. in December will help to ease early winter concerns in a market that is very nervous and volatile. If early season draws from storage are lower than normal, fears of shortages later will subside. This may dampen upside volatility in gas prices. Demand for electricity will tend to be lower under the warmer outlook which will result in moderate prices, particularly in the eastern and southern markets. In January: Northeast - Warmer than normal Southeast - Warmer than normal N Central - Warmer than normal, especially NE/IA S Central - Warmer than normal, especially OK/KS Northwest - Cooler than normal Southwest - Warmer than normal, except for CA/NV Expected Market Impact (provided by ESAI) WSI's January forecast indicates warmer-than-normal temperatures in all areas except the Northwest regions. In the Northeast markets there is currently a high level of concern that delivery curtailments due to gas pipeline limitations under very high demand conditions will develop under extreme cold conditions in January. The warmer-than-normal outlook reduces the potential for these local gas delivery congestion events to occur. Severe cold weather tends to take a toll on generator operations in the form of higher levels of forced outages and the warmer outlook reduces the potential for generator outages. The warmer January outlook is bearish for eventual actual power prices relative to the current high prices for January deliveries in the forward energy markets. In February: Northeast - Cooler than normal, except for PA/NJ Southeast - Warmer than normal N Central - Cooler than normal, especially ND/MN S Central - Warmer than normal, especially OK/KS Northwest - Warmer than normal, except ID/MT Southwest - Warmer than normal Expected Market Impact (provided by ESAI) The WSI February forecast indicates cooler-than-normal temperatures in the key Northeast and North Central heating regions. The cooler weather will increase heating demand in these areas which will be bullish for natural gas prices. However, if the warmer weather materializes in December and January, the market will be less concerned about supply issues as inventories should be above average in February. The chance of extreme cold disrupting local supplies in the Northeast does still exist with a higher likelihood under this colder forecast. Higher delivery costs for gas in the Northeast areas will have a bullish impact on power prices in February in addition to the potential for higher demand loads. According to WSI seasonal forecaster Dr. Todd Crawford, "The strong ocean temperature signal in the Pacific Ocean suggests a warm winter across most of the southern US. The tougher question is how far north these above-normal temperatures will extend. We currently feel that below-normal temperatures will be confined to the northern tier of states this winter, along with the Pacific Coast cities." WSI successfully predicted (1) the hot summer nationwide in 2005, (2) the sharp transition to warm weather over the eastern US in June 2005, and (3) the cold and snowy winter of 2004-05 in the Northeast. Their three-month seasonal forecasts have been skillful for 8 out of the last 12 periods. A skillful seasonal forecast is defined as one that is closer to what is actually observed than a forecast using the 30-year average temperature. WSI, which provides customized weather information to energy traders, issues its seasonal outlook twice monthly. The next forecast update for December-February will be issued on November 23, with the next new forecast package (for January-March) issued to clients on December 13 and to the press on December 20. About WSI WSI Corporation 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 headquartered in Andover, Massachusetts with offices in Birmingham, England, and is a wholly owned subsidiary of Landmark Communications. 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 . SOURCE: Weather Services International News Provided By |
