Gatun Lake is one of the main sources of water for both Panama City and the Panama Canal.
Researchers from the Smithsonian Tropical Research Institute have been collecting data on Barro Colorado Island.
It's an island on the lake which makes up the middle of the Panama Canal.
Steve Patton, Director of the Physical Monitoring Programme with STRI says the current El Ni?o cycle is setting records in temperatures and rainfall in Panama, and it is doing it a lot earlier than in previous years.
"The last really big one was in 1997-98, and this year the drought began two months earlier than in that event. So, if this event continues to develop as the 97-98 event did we could be much worse off."
El Nino is already being blamed for the severe droughts in the province of Azuero in Panama, affecting crops and cattle.
ETESA is the public company in charge of the transmission of electricity across the country.
It's also responsible for compiling national weather data in Panama.
Berta Olmedo, ETESA's head of Meteorology, says the effects of El Ni?o are being compounded by climate change.
"This signal of the 'El Nino' phenomenon is added to the signal of climate change, and that's why we are having, practically during the whole month, we have twenty, twenty two days, where the average minimums are exceeded, and the average maximums are exceeded."
The Panama Canal Authority is also closely monitoring the effects of the current El Nino cycle, keeping a sharp eye on water levels.
Carlos Vargas with the Panama Canal Authority says water conservation measures are already being undertaken.
"In 102 years of records that we have, we have had the lowest flow of the Chagres river compared to 102 years of history. So, yes, a severe drought is happening in the area of the Panama Canal, but we are facing water conserving measures, in communication with our clients, and with an adequate handling of the situation."
The water conservation strategies along the Panama Canal include dredging the lake, as well as reusing water from the lock chambers before allowing it to flow into the ocean.
The current El Nino-fueled drought is expected to continue until April or May.
