Energy Traders Turn to AI to Forecast the Weather Forecast

In Europe’s weather-driven energy markets, traders are turning to AI and machine-learning tools designed not to predict temperatures and precipitation, but to forecast the forecast.

That means predicting whether the European Centre for Medium-Range Weather Forecasts’ two-week outlook — the definitive reference point for traders repricing risk around heating demand, renewable output and system tightness — is about to shift warmer or colder.