The US saw a relatively cold week for much of the country last week as cold Arctic air migrated into the Upper Midwest and eastern states, keeping energy demand requirements relatively strong for late January. This recent cold snap is following the WTI forecast for most demand centers around the country. The North Atlantic Oscillation (NAO) sat in neutral/slightly negative phase, and this pattern allowed more seasonally cool air to migrate into demand centers in the central and eastern US. The outlook going forward is for warmer and wetter conditions to develop in the east, which will start to set up the transition to an overall warmer pattern as we move into February; completion of this transition will verify the WTI long range forecast made last year. However, cities in the northwest will see a cooler pattern emerge this week and higher demand will follow as a trough moving south/southeast from the Gulf of Alaska migrates into British Columbia, and some of the cool air associated with this system will affect the northwestern US states. March crude is currently sitting around the $90 mark, after trading in a slightly bullish channel during last week’s shortened trading week. The cold air that affected demand in many of the nation’s demand centers kept energy requirements high, and played a part in the rally seen in across the board in energy futures last week. Many factors will influence the direction of energy futures, but the weather picture is supporting a slight retracement from last week’s activity in both natural gas an heating oil, as the mild outlook is a stark contrast to the cold temperatures that much of the country saw at the end of Jan 2007. While the technicals (stochastics/RSI) are currently bullish, the WTI forecast supports more downside activity in the short term as the milder pattern expected for February will reduce demand requirements.

This entry was posted on Tuesday, January 29th, 2008 at 5:10 pm and is filed under Energy, Global Weather, United States. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.