U.S. natural gas futures surged more than 20% to $4.7 per MMBtu on Wednesday, the highest level since early January, extending gains of about 26% earlier in the week as sharply colder weather forecasts triggered a weather-driven rally. Forecasts already pointed to very cold conditions over the weekend but shifted on Monday toward much colder scenarios as the polar vortex expanded, allowing Arctic air to spill across much of the Northern Hemisphere. NOAA’s Climate Prediction Center issued a high priority alert for extreme Arctic cold and potential winter storms across the central and eastern US through month end, driven by a well established negative Arctic Oscillation drawing frigid Canadian air deep into the country. The most severe cold is expected in the final week of January, sharply lifting residential and commercial heating demand expectations. Meanwhile, US gas production remains elevated and LNG export flows are modestly lower.
