Colder October-December Weather May Boost Gas Demand, WSI Says
The northern and eastern U.S. will probably be cooler than normal from October to December, increasing natural gas consumption, according to a joint forecast by Weather Services International and Energy Security Analysis Inc.
A cooling in the Pacific known as La Nina may act with pressure differentials and atmospheric blocking in the Atlantic Ocean to lower temperatures along the U.S. East Coast, said Todd Crawford, WSI’s chief meteorologist.
“While October should be relatively mild across much of the U.S., below-normal temperatures will become more common in the eastern U.S. in November and across all of the northern U.S. by December,” Crawford said in a statement.
Natural gas traders use long-range temperature predictions to gauge energy use and market fluctuations. Hot or cold weather can increase demand for heating and cooling, and power plants use about 30 percent of the nation’s gas supplies, according to Energy Department data.
Maintenance of coal and nuclear-powered generating plants will put more demand on natural gas-fired electric plants in October, said Paul Flemming, director of power and gas services at Energy Security Analysis, a market research company based in Wakefield, Massachusetts.
Flemming said that because of increased gas demand in October, he doubts inventories will reach last year’s record of 3.84 trillion cubic feet. The inventory will probably be 3.65 trillion at the end of the current injection season, he said.
“In December, much-colder-than-normal temperatures across the northern tier of the U.S. will result in much higher heating demand for gas,” Flemming said in the statement. “Typically, early-season cold weather indicators are bullish for gas prices, as a long-term cold stretch starting in December could significantly reduce gas inventories.”
Andover, Massachusetts-based WSI also predicted colder- than-normal weather across the U.K. and Western Europe from October to December, which will increase energy demand there.
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