Little Heat Relief Expected In East; Natural Gas Gets Support

Forecasts are warm across much of the East through the next 10 days, and thus far indications are that they are unlikely to cool off much through the ensuing 10 as well. In our morning update for clients, we outlined that at these price levels, very hot forecasts appeared to be the only thing providing significant support for natural gas, as current and forecast heat are helping to keep power burns of the fuel decently elevated despite cheaper coal taking a greater percentage share of overall burns. 

By now, most traders will have gotten used to this heat in long-range forecasts from the Climate Prediction Center for the 8-14 Day forecast, like the one below. 

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This continues to match other weather guidance as well, with the early-morning 6z GFS ensembles still showing temperatures above average almost everywhere come Sunday, July 24th. 

What makes this heat particularly interesting is how it refuses to abate in a number of key energy demand regions. As can be seen below, PWCDDs are expected to be 14% above average through the next 7 days. This is a trend we can expect to see for at least the next couple of weeks. 

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When looking even further into the long-range forecast, there are few indications of this warmth easing. CFSv2 American climate guidance does show that warmth may not be quite as impressive Weeks 3 and 4, as seen below. 

However, this is some of the coolest weakly guidance in this timeframe and it still keeps temperatures slightly above average across the Southeast both Weeks 3 and 4. Using more organic methods, the Recurring Rossby Wave Train theory would argue for more warmth across the East in the 11-20 Day period, as seen below courtesy of theplayerstour.net. Though not always the most accurate method, this can provide a broad idea of what the pattern is most likely to look like given recurring atmospheric patterns around the globe.

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Of course, the going pattern will not be entirely sustained; there continue to be indications that in the 12-18 Day timeframe there will be increasing cooler risks across the Northeast and Mid Atlantic as ridging focuses across the center of the country. However, any days through July with cooling demand significantly below average nationwide are looking increasingly unlikely, even as forecasts bounce around in the long-range.