The three-year La Nina that ended in March could give way to hotter temperatures in Asia this summer and boost consumption of natural gas and other fossil fuels across the region.
The U.S. Climate Prediction Center last week increased the probability of El Niño weather conditions emerging between June and August to 75%.
While the phenomenon generally tends to bring warmer weather to Asia and the northern United States during the winter and has less of a signature during the summer, climate change is exacerbating its impacts, which could mean a stronger influence over the next year and beyond.
“The background state of the earth is much warmer than normal. In my opinion, that trumps El Niño,” said Rhett Milne, chief meteorologist at NatGasWeather. “A warm global background state is going to be the primary driver of the summer, and it should be a hotter-than-normal summer over most of the northern hemisphere, but El Niño can influence that, too.”
El Niño refers to the periodic warming of sea surface temperatures across parts of the Pacific Ocean. La Nina ended in March and the earth is currently in a neutral state. But Maxar Senior Meteorologist Steven Silver told NGI that it looks likely El Niño will develop by summer as sea surface temperatures are already warmer than normal. He added that Maxar expects a hotter summer too.
The hottest year on record occurred in 2016 during a strong El Niño. A heat wave is already roiling parts of India, Thailand, Bangladesh and China, which has reinforced efforts to boost coal supplies to avoid energy shortages and could lift spot LNG purchases.
El Niño arrives at a time when European natural gas storage inventories are at their highest levels exiting winter in over a decade. Stocks could be full by August. A boost in Asian cooling demand would help liquefied natural gas cargoes find a home amid what’s likely to be weak demand in Europe this summer.
There’s also a slight chance El Niño could bring colder weather to northern Europe this winter as it continues to diversify its energy supplies, but the Atlantic has more of an impact on the continent’s weather patterns. Silver said El Niño tends to have a greater impact on the United States, which is directly downstream of the Pacific, along with other regions closer to that ocean.
El Niño also increases wind shear across the Atlantic, which weakens tropical storm systems and helps to reduce the number of hurricanes.
“For the Atlantic Basin, we tend to have less hurricanes during El Niño, which would mean less impacts for LNG,” Milne told NGI. “It does tend to bring less typhoons as well to eastern Asia.”
Researchers at Colorado State University (CSU) last week said they anticipate a slightly below-average Atlantic hurricane season this year, which runs from June 1 to Nov. 30. CSU predicted that 13 named storms will form in the Atlantic this year, and they expect six to become hurricanes. That’s compared to the 14 storms that formed in the basin last year, which is in line with the annual average since 1990.
Hurricane preparedness is a top priority for the U.S. oil and gas sector.
In 2021, Hurricane Ida knocked out natural gas supply from the Gulf of Mexico for weeks, while Hurricane Laura shuttered the Cameron LNG facility for more than a month in 2020. Hurricanes can also impact natural gas demand and market dynamics. Last year’s Hurricane Ian for example hit demand in the Southeast, and impacted prices.
