Energy traders who wait for a key government weather forecast each day could get a jump on the news thanks to a new product from WSI Corp. that predicts an hour ahead of time what the government model will reveal. Andover, Mass.-based WSI launched WSI MarketFirst toward the end of 2006. The solution is designed to predict the results of the Global Forecasting System (GFS) model's forecast.

The National Weather Service runs the GFS model four times a day. The noon report forecasts the weather for the entire U.S. for the next 15 days.

"The GFS model, when it comes out around lunchtime, can be a market mover in the natural gas and energy market," explains Ira Sharf, WSI's VP of energy services. Like the Federal Reserve Bank's decisions to raise or lower interest rates, "It's a piece of information that comes out on a daily basis, and all the traders are sort of hanging on this information," he relates. "If the model run that comes out at noon differs significantly in its forecast for the next week or two weeks from what it said 12 hours ago, the price of natural gas could be expected to jump."

According to Sharf, MarketFirst provides a prediction of the noon GSF forecast at 11 a.m., an hour before the GSF results are available. The product is composed of individual forecasts for each day, from day 6 to day 15, as well as two aggregate forecasts for days six through 10 and days 11 through 15.

In presenting its predictions for the GSF model results, WSI divides the results into three confidence levels: high confidence, moderate confidence and regions where it has no prediction. In the regions where it has high confidence - which make up 40 percent of the map on any given day - WSI is right 80 percent of the time, contends Sharf.