WSI: Third Relatively Cool Summer in a Row Likely in Eastern US

Big Heat Confined to Western US Again

US seasonal forecast for May-July 2015 (Graphic: Business Wire)

US seasonal forecast for May-July 2015 (Graphic: Business Wire)

ANDOVER, Mass.--()--WSI (Weather Services International) has issued their latest forecast for the May-July period. The forecast indicates generally below-normal temperatures southeast of a Phoenix-to-Buffalo line, with continued above-normal temperatures expected much of the western and northern US. The WSI seasonal outlooks reference a standard 30-year normal (1981-2010).

According to WSI Chief Meteorologist Dr. Todd Crawford, “As the 2015 El Nino event continues to emerge and strengthen, we expect the prevailing pattern over the next few months to acquire more of an El Nino ‘flavor’, with above-normal temperatures north and west, and below-normal temperatures south and east. The drought in the West will accentuate the summer heat there, as we expect the most anomalous summer warmth to occur in the Pacific Northwest. By later in the summer, as the El Nino event continues to strengthen, more significant below-normal temperatures will become more likely across the north-central and northeastern US.”

In May, WSI sees the monthly breakdown as:

Northeast* Cooler than normal

Southeast* Cooler than normal, except Florida

North Central * Warmer than normal

South Central* Cooler than normal

Northwest* Warmer than normal

Southwest* Cooler than normal

According to Chris Kostas, Senior Power and Gas Analyst at ESAI Power LLC, “Delivered gas prices in the Mid-Atlantic and Northeast regions should be very soft in May given the moderate temperatures expected. Power prices in Texas and Florida should also be relatively soft given the below-normal temperatures expected across the South. While much of the price softness may be attributed to soft electrical demand, significantly higher year-over-year natural gas production should help to pressure natural gas prices lower. Higher year-over-year inventory levels (due to lower heating demand this past winter), will also reduce year-over-year injection rates and help to keep gas prices soft and stable. Warmer-than-normal temperatures in the West and Northwest should boost electrical demand in those regions and increase power prices given the considerably low hydro generation that is expected this year (due to the ongoing drought conditions). Generator maintenance will continue to influence power prices and implied market heat-rates by reducing available baseload generation in May, though these effects should be minimal by the end of the month. The effect of coal-fired generator retirements related to the EPA’s Mercury and Air Toxic Standards (MATS) should begin to affect power prices and implied market heat-rates in late May as electrical demand begins to increase.”

In June, WSI forecasts:

Northeast Cooler than normal

Southeast Cooler than normal

North Central Warmer than normal

South Central Cooler than normal

Northwest Warmer than normal

Southwest Warmer than normal

Kostas added: “With June temperatures expected to run warmer-than-normal in PJM and MISO, we expect the first real effects of this year’s coal-fired generator retirements to be felt by early summer. Aggregate natural gas demand will likely be higher than last year as the country’s power supply becomes more dependent on gas-fired generation to fill the void created by the MATS driven coal retirements. Implied market heat-rates should become quite strong in regions affected by the coal retirements as relatively soft natural gas prices combine with increasing cooling demand in late June. With warmer-than-normal temperatures also expected in Northern California and the Northwest, power prices and implied market heat-rates are also likely to be strong in those regions considering the diminished hydroelectric potential that is expected.”

In July, WSI forecasts:

Northeast Cooler than normal

Southeast Warmer than normal

North Central Warmer than normal

South Central Cooler than normal

Northwest Warmer than normal

Southwest Cooler than normal

Kostas noted: “Warmer-than-normal July temperatures in Northern California and the Northwest region this year will boost electrical demand and raise power prices to what may be very high levels. While California has increased their solar potential over the past couple of years, significantly reduced hydro generation should support power prices through the end of the month. In the Northeast and Mid-Atlantic regions, soft summer demand should help to minimize the effects of reduced coal-fired generation in July. Very high implied market heat rates can be expected during the hottest periods, however, as soft regional gas prices combine with peak energy demand.”

WSI provides customized weather information to global commodity traders via its industry-leading WSI Trader Web site. WSI will issue its next seasonal outlook, including an updated summer forecast, on May 26.

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

About WSI

Weather Means Business™. WSI is the world's leading provider of weather-driven business solutions that enable enterprises to make better decisions using the most accurate and precise weather data available.

WSI serves some of the world's biggest brands in the aviation, energy, insurance, and media markets, as well as federal and state government agencies. We are proud to be a part of The Weather Company, which focuses entirely on the weather, delivering billions of discrete forecasts per day around the world, through a media portfolio that includes The Weather Channel®, weather.com®, WSI and Weather Underground. Learn more 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.

Contacts

WSI
Michelle Boockoff-Bajdek, 978-983-6637
mbb@wsi.com
or
Energy Security Analysis, Inc.
Tommy Sutro, 781-245-2036
tsutro@esai.com

Contacts

WSI
Michelle Boockoff-Bajdek, 978-983-6637
mbb@wsi.com
or
Energy Security Analysis, Inc.
Tommy Sutro, 781-245-2036
tsutro@esai.com