Natural gas prices may finally be beginning to perk up as traders anticipate colder weather ahead. Jeremiah Shelor for Natural Gas Intelligence reports that PointLogic Energy analyst Alan Lammey said the firm’s six- to 10-day outlook, which has high forecast confidence, was exhibiting “the arrival of potentially some of the coldest temperatures the nation has seen during late December in about 17 years. What is known is that an exceptionally amplified jet stream pattern will develop across North America with a series of strong ridges and troughs. One of these is an impressively large and sharp trough that will dig southward across the Lower 48 allowing Arctic air to flood south. What remains uncertain at this time is how far east this surge of Arctic air will progress.”

Meanwhile, MDA Weather Services , in its latest six- to 10-day, said forecast changes from Sunday “were colder from the West to the Midcontinent” due to flows from the Arctic, which may fuel “even strong below normal temperatures into the Northwest, Rockies, Plains and Midwest.”

The cold weather could finally trigger increased heating demand across the nation. Around half of U.S. homes utilize natural gas for heat, driving up prices during the winter months when temperatures fall.

The weekend weather guidance “finally picked up on the significant cold trends in the long-range we had been watching, as those translated into the medium-range and are seen bringing a very significant shot of heating demand to the country….Prices did gap up in line with expectations last evening, though the gap was rather small compared to rather major cold trends, as bulls may still be timid in the face of such significant declines last week,” Bespoke Weather Services said. “It is clear that weather is responsible for almost all of this rally, and if cold were to trend unimpressive prices would quickly pull back.”

For more information on the natgas market, visit our natural gas category.

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