It Isn't All Bearish For Natural Gas After All

It isn't all doom and gloom for the natural gas market. Mother Nature, which needed to play a pivotal role in pushing natural gas prices higher, finally came to the rescue over the holiday weekend.

TDDs

10-15 Day

15-Day

Now for those of you unfamiliar with what this pattern shows, it is normally associated with a "very" bullish weather set-up. What you typically want to see in the "holy grail" of bullish weather is for massive red in both Alaska and Greenland. This blocking pattern allows the cold air to be trapped in the Lower 48 generating much higher than normal heating demand.

The issue I see here is that the weather models are projecting the cold to escape into the West as opposed to the bullish set-up in the East. Population-weighted heating demand is concentrated mostly on the East coast, so without the Northeast showing substantially colder than normal weather, you won't have a "spike" in demand.