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US energy traders could be in the beginning stages of pricing in a cold January as natural gas futures top $4. There’s also the unresolved European energy crisis as US LNG exports increase.

NYMEX Henry Hub natgas jumped 3.5% to $4.018 on Wednesday morning as the Northern Hemisphere winter officially began on Tuesday. Prices still trade in a month’s long horizontal flat, and there’s no confirmation on an upside breakout — yet. 

One of the main drivers in today’s price action could be new long-range forecasts that point to colder temperatures for the US-Lower 48 next month. 

US-Lower 48 heating degree days shows temperatures are set to decline from Dec. 25 – Jan.6, which means energy demand will increase to heat a building structure. 

Meteorologists at private weather forecasting firm BAMWX released their three and four-week forecast that shows a much cooler US through the second half of January. 

Earlier this month, readers may recall that we noted bullish signs for natgas were emerging as forecasts pointed to colder weather for January. As forecasts become more concrete, this could suggest natgas futures have some possible upside. 


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