Winter is here (in the forecast at least)! Natural gas markets skyrocketed upwards on revisions to the 11–15-day forecast, showing the first significant below normal temperature in the first week of December. The NYMEX front month (December) contract climbed $0.18 USD/MMBtu or 4% to settle at $4.55 USD/MMBtu. The peak winter strip (Dec-25, Jan-26, and Feb-26) rose an average of $0.16 USD/MMBtu. The move nearly covers all the losses experienced in gas markets on Monday.

Temperatures are expected to remain warmer than normal until November 26th before flipping to colder than normal into the first week of December. Longer-term forecasts expect that the cold will persist through December and into the following winter months. Meteorologists use last year as a good analogue year with similar conditions. The biggest difference is that last December was warm. In fact, North America hasn’t experienced a 30-year normal (cold) December in the last decade, suggesting that if December predictions are accurate, we could see significant upside volatility. (PB)