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ENSO may still suggest cold winter despite weakening La Niña expectations

Forecastsfor the upcoming winter based on the El Niño Southern Oscillation, or ENSO, hadanticipated a La Niña to develop after strong El Niño conditions presidedduring the warm winter of 2015-16. The latest analysis now implies that neutralconditions may remain in place through January, which may also result in coldconditions in the Lower 48.

"ElNiño obviously played a big role in the record heat that we've had this yeararound the globe so far," Dan Leonard, senior meteorologist at The WeatherCompany, said at the LDC Mid-Continent Forum in Chicago on Sept. 13. "Whatwe look at is the atmosphere's response to that warm water. The key takeawayfrom this is that we're getting close to neutral levels and slowly approachingLa Niña levels."

SNL Image

Dan Leonard, senior meteorologist at The Weather Company

Source: SNL Energy, an offering of S&P Global Market Intelligence

Forecastsfor La Niña have decreased over the last couple of months as equatorial watertemperatures in the eastern Pacific Ocean have warmed again. The NationalOceanic and Atmospheric Administration had predicted a 75% chance of La Niña ina May 12 discussionbut said on Sept. 8that there is a 55% to 60% chance of ENSO-Neutral conditions.

"Withtime, each one of these passing model runs each month, [temperatures] shiftedup more," Leonard said. "In the last month, there are actually moreensemble members now that are above zero that show weak El Niño conditionsheading into this winter than there are models that show La Niña."

WhileEl Niño is typically bearish for natural gas prices and La Niña is bullish, theshift toward neutral conditions will create more uncertainty and potentiallyvolatility.

Leonardsaid that it is important to look at standing waves in the 500 millibar levelof the atmosphere, which is roughly 18,000 feet in altitude and which generallycorresponds to a low-level jet stream.

"Thekey here is that if we can predict the standing waves at the 500 millibarlevel, then we can infer what the pattern might be like in the Lower 48 goingforward," Leonard said. "Something at 500 millibars will give us abetter sense of the pattern in the Lower 48 that supports gas-weighted heatingdegree days in the wintertime."

Thedata allows for the creation of a "Demandex" indicator, which has abetter correlation than other data, according to Leonard. Using figures throughMarch, he showed that the indicator is currently projecting strong demand fornatural gas this winter.

"Myresearch suggests that the highest values of Demandex, meaning the coldestweather in the Midwest and East during the winter time, occur during neutralphases of ENSO," Leonard said. "In fact, the further away you getfrom neutral ... you actually get lower phases of Demandex, i.e. warmerweather."

Leonardsaid that there is also an increased likelihood of cold winters in the Lower 48when sea surface temperatures near Alaska are warm and temperatures north ofHawaii are cool. He said if those conditions exist in November, as they arecurrently projected to be, then they are likely to remain in place in Januarytoo.

Aconflict is in place now though, as Leonard expects a relatively cold winterwhile other forecasters expect above-normal conditions due to the migrationtoward weak El Niño conditions.

"Thebottom line is stay tuned. It's just a little too early to know for sure."