FX.co ★ US Natgas Prices Extend Weather Rally

U.S. natural gas futures surged by over 5% to reach $3.80 per MMBtu on Tuesday, marking the highest level in three weeks. This rise builds on a significant 15.6% increase seen on Monday, prompted by forecasts of sharply colder weather which triggered a weather-driven rally. Initially, weekend forecasts indicated very cold conditions; however, by Monday, predictions adjusted to even colder scenarios as the polar vortex expanded, allowing Arctic air to penetrate much of the Northern Hemisphere. The NOAA’s Climate Prediction Center has issued a high-priority alert for extreme Arctic cold and potential winter storms set to affect the central and eastern United States through the end of the month. This is attributed to a strongly established negative Arctic Oscillation, drawing frigid Canadian air deeper into the country. The most intense cold spell is anticipated in the final week of January. Meanwhile, natural gas production remains high, although LNG export flows are slightly reduced.