FxWirePro: Polar Vortex might be back to skyrocket natural gas this winter

Our Natural gas long position created at $2.6 per MMBtu has reached two of our stipulated targets; $3.1 per MMBtu and $3.7 per MMBtu and the current weather forecasts suggest that further targets are likely to get reached too. The next targets are $4.3 per MMBtu and $5.5 per MMBtu. We had expected the targets to reach by next summer but the severe weather forecasts this week that bring back the memories of polar vortex winter of 2014, could lead the natural gas to faster rise in prices.

The anticipation of a freezing winter began to build this week when weather maps and forecast models showed similarities between next week's system and one that developed in January 2014. Meteorologist Ryan Maue tweeted, "Upper-level atmosphere configuration very similar in scale & magnitude as infamous Jan 2014 #PolarVortex popularized by me and @afreedma," A shift in the polar vortex back in 2014brought coldest of winters in some parts of the United States, which finally led to a severe shortage of natural gas in some areas and was responsible for the death of 9 people. In Midwest and North-Eastern part of the United States are expected to experience temperature at single digit next week in Fahrenheit scale and negative in Celsius scale. Temperature is already much below freezing in Chicago.

Natural gas inventory could deplete at a very fast rate if next week turns out to be much more severe. Gas is currently trading at $3.73 per MMBtu.