Bloomberg News

No Weather Boost Expected for Energy Markets to Mid-May

May 11, 2012

The U.S. East Coast is expected to be warm and the South seasonal through the next two weeks without creating much demand for energy to cool homes and business, according to forecasters.

Temperatures are expected to be 3 to 5 degrees Fahrenheit (1.7 to 2.8 Celsius) above normal across much of the Midwest to Northeast from May 16 to May 20, said Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland. Chicago and the Great Lakes may be as much as 8 degrees above normal.

“The East Coast is fairly quiet over the next two weeks with 70s and just a few low 80s at times,” Rogers said in a note to clients. “The South is also seasonal to cool through most of the period, which suppresses early cooling demand.”

Commodities traders watch temperature forecasts to gauge energy use and needs. About 51 percent of U.S. households use gas for heating, according to the Energy Department, while demand from electricity generators peaks in the summer months to meet air conditioning demand.

Warm weather from the Midwest to the Northeast from May 12 to May 18 probably won’t require energy to cool homes and businesses, according to a forecast from David Salmon, owner of Weather Derivatives in Belton, Missouri.

The South may need 30 to 60 percent less energy for cooling than usual at this time of year, Salmon said.

Warm weather expected for southern California and the Southwest may require 30 to 60 percent more fuel than normal to power air conditioners, he said.

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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