Natural gas futures (NATGAS) are rising nearly 3% today, as weather forecasts suggest that next week, an arctic air mass from Canada will bring significant cooling to the U.S. East Coast, testing power grids and increasing demand for heating fuels.
- Temperatures are expected to drop 4–8°C below normal across much of the U.S. Great Plains through February 18, particularly in the Mississippi Delta basin. On the U.S. East Coast, declines below normal may reach 4°C.
- The polar vortex, a band of winds that keeps cold air in the Arctic, may cause frigid air to flow into Canada and the U.S. U.S. natural gas futures are reacting to these prospects with continued gains.
- Since the beginning of the month, gas prices have risen by over 22%. PJM Interconnection LLC, managing the power grid from Chicago to the East Coast, has called on power plant operators to take measures to protect equipment from freezing. Low temperatures could significantly reduce the supply of gas and oil.
- Additionally, the potential development of a large storm forming in the U.S. could intensify the cold. The so-called polar vortex has stretched for the tenth time this winter but has not completely broken down, which may mean that the frigid conditions will be intense but short-lived. The phenomenon is partly caused by high pressure over Alaska.
Furthermore, the Arctic and North Atlantic oscillations have shifted to negative phases, favoring the influx of cold air into North America and Europe. By the end of the month, temperatures are expected to rise above normal in western Canada and the central U.S., reaching near-average values in other regions. However, there is a possibility that parts of the Northeast, including New York, will remain chilly.
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Gas prices are rising for the fifth consecutive session. The contract price is approaching a key resistance
