NatGas Soars As 45 Million Americans Face Winter Storm Threat

[Elderberry]

zero Hedge by Tyler Durden 1/28/2022

A powerful Nor'easter has put 45 million Americans under winter storm watches and warnings Friday into Saturday from the Carolinas to northeastern Maine. The prospects of the storm and cold weather have sent U.S. natural gas futures soaring Friday morning.

The National Weather Service (NWS) warned about a "powerful Nor'easter is expected to develop off the Mid-Atlantic coastline on Friday before impacting eastern parts of the Northeast and New England this weekend." Heavy snow is expected across eastern Long Island/New England with gusty winds that could produce blizzard conditions.

U.S. natural gas futures have risen for the sixth day ahead on prospects of a winter storm and colder weather. Futures for March delivery were up more than 13% to $4.786 around 0900 ET.

    While we don't yet have full clarity on what drove today's 46% rally in US natural gas prices to $6.27/mmBtu during the last 30 minutes of trading before the close, we do not believe it was supported by fundamentals. The more likely explanation is that the rally reflected limited liquidity during short covering trades near the close as the February contract expired. Accordingly, we expect a correction lower from here to align NYMEX gas more closely with physical markets. Assuming 10-year-average weather for the remainder of winter, we maintain our $3.65/$3.45/mmBtu Bal winter/Sum22 Nymex gas price forecast, vs forwards currently at $4.28/$4.29/mmBtu.

Commodity analysts at Rabobank added their take on yesterday's squeeze:

    For example, US natural gas prices leaped 72% overnight before retreating. Thin markets, yes, and a short squeeze into options expiry. Regardless, hardly the kind of calm trading in a key commodity that already-rattled markets wanted to see. And hardly a bearish price signal.

More: https://www.zerohedge.com/weather/45-million-americans-under-winter-storm-threat-0?utm_source=wnd&utm_medium=wnd&utm_campaign=syndicated

[IsailedawayfromFR]

Not to worry, Biden and Yellen are on top of it, blaming those evil oil companies.

[AARguy]

I'm so glad I retired to the Texas coast where I have seen snow once in five years... well... ok... and a dusting that melted in an hour. I grew up in New York shoveling the family car out of the snow with some frequency. I've also lived in Massachusetts and New Hampshire, slipping on sidewalks and sliding sideways down highways. Living where it snows is as sensible to me as hitting yourself in the head with a ballpeen hammer.

[IsailedawayfromFR]

I'm so glad I retired to the Texas coast where I have seen snow once in five years... well... ok... and a dusting that melted in an hour. I grew up in New York shoveling the family car out of the snow with some frequency. I've also lived in Massachusetts and New Hampshire, slipping on sidewalks and sliding sideways down highways. Living where it snows is as sensible to me as hitting yourself in the head with a ballpeen hammer.

I went through the same treatment in Connecticut for a number of years.  Only reason I survived the work of shoveling snow is I was in my 30s.

My brother who lived in Rochester for awhile solved his problem by moving to Florida.

Neither of us plan on ever moving again.