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Mild Weather May Trim Energy Use 20% to 60% in Eastern U.S.

Jan. 20 (Bloomberg) -- Homes and business along the U.S. East Coast may use 20 percent to 60 percent less energy for heating next week, said David Salmon, a meteorologist with Weather Derivatives.

The eastern U.S. from Maine to Florida will average 6 to 10 degrees Fahrenheit (3.3 to 5.6 Celsius) above normal from Jan. 26 to Jan. 30, according to Salmon, owner of the commercial forecaster in Belton, Missouri.

“National Weather Service modeling is leading all to believe that the coming week, usually the coldest of the year, will have incredibly low heating needs,” Salmon said in a note to clients.

Traders use long-range temperature predictions to gauge energy use and demand for heating and cooling. Natural gas for February delivery on the New York Mercantile Exchange has slumped 22 percent this year as warmer weather sapped demand.

Gas rose 0.9 percent to $2.342 per million Btu as of 10:29 a.m. on the Nymex today, trimming a 6.1 percent drop yesterday that drove it to the lowest level in 10 years.

January’s gas-weighted heating degree days value for the U.S. was 479, or 73 below the 30-year average of 552, through Jan. 18, according to Travis Hartman, a meteorologist at MDA. It is 61 below the 10-year average.

Warm January

“That is the sixth warmest on record,” Hartman said yesterday by telephone. “Here we are in what is supposed to be the coldest month of the year and we are in the top handful of warmest Januarys on record. We’re well below normal in terms of heating demand. No question it has been a warm, bearish January so far.”

The values are calculated by subtracting the daily average temperature from a base of 65 degrees to show energy demand. Higher values mean cooler weather and more energy being used to heat homes and businesses. Gas-weighted values are designed to reflect natural gas usage.

Salmon, Commodity Weather Group LLC President Matt Rogers and MDA are predicting warmer-than-normal weather across most of the U.S. in the coming week, with the exception of the Pacific Northwest.

Energy use for heating for most of the Pacific Northwest to San Francisco will probably be near normal for this time of year, Salmon said. Seattle may use 10 percent more than normal, he said.

U.S. Outlook

Temperatures in most of the U.S. as well as eastern Canada are expected to be about 5 degrees higher than normal, said Rogers from his office in Bethesda, Maryland.

MDA predicts temperatures will be about 5 to 7 degrees above normal in most of the eastern U.S. and may reach 8 to 14 degrees above normal in the Ohio Valley and mid-Atlantic area.

In his 11- to 15-day forecast, Rogers calls for frigid air to return to Alberta and Saskatchewan in Canada and to seep into the Pacific Northwest and northern Great Plains. The U.S. East Coast will have more seasonal temperatures, he said.

MDA predicts temperatures across Alberta may drop to 15 degrees below normal.

Warmer-than-normal weather will spread across much of the central and southern U.S., including Texas and the lower Mississippi and Ohio river valleys from Jan. 30 to Feb. 3, Rogers said.

MDA predicts the Gulf of Mexico coast may have the highest temperatures.

Salmon doesn’t issue an 11- to 15-day forecast.

For Jan. 27, the normal average temperature in New York is 32.5, according to MDA EarthSat Weather in Gaithersburg, Maryland. In Boston it’s 29; in Chicago, 24; Atlanta, 44; Houston, 54; Seattle, 43; and Burbank, California, 55.

To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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