Strong Arctic Blast Late This Week but Warm US Pattern Dec 27-Jan 1 Sinks Prices
By natgasweather

Strong Arctic Blast Late This Week but Warm US Pattern Dec 27-Jan 1 Sinks Prices

December 19, 2022: There were interesting trends in the weekend weather data, highlighted by colder trends over Texas/ERCOT for late this week and next weekend as the Arctic front advances deeper into the southern US. However, the weather data trended warmer for Dec 27-Jan 1 as the frigid cold pool retreats into Canada and where warmer than normal temperatures are favored to spread across most of the US for lighter than normal demand. Essentially, colder trends into Texas/ERCOT Dec 22-26 are likely to be less important than big warmer trends across the US Dec 27-Jan 1, especially after the GFS shed a hefty 20+ HDDs for this period. As far as details, strong national demand will greet the new trading week as near to below normal temperatures rule most of the US. The coldest air will be over the N. Rockies and N. Plains w/low of -20s to 0s, while also cool over the southern and eastern US w/lows into the 20s and 30s. Arctic air over W. Canada and the N. Plains will advance aggressively south and eastward Fri-Sun w/lows of 0s to 20s advancing deep into Texas and the South and where colder weekend trends were observed. Wellhead freeze-offs are likely to increase as the week progresses and likely to drop production by at 2-3 Bcf/day, but potentially more next weekend as Arctic air pushes into ERCOT. There’s potential for impacts to the electricity grid over SPP and ERCOT due to frigid temperatures, but the duration will be much shorter than what occurred in Feb 2021 for lesser impacts, although still in need of close monitoring. Also of importance, a strong winter storm is expected over the East next weekend as the Arctic front phases w/moisture for heavy rain and snow. However, most important, the weekend weather data trended further warmer with the US pattern for Dec 27-Jan 1 as subfreezing air retreats to Canada. With highs of 60s and 70s over the southern US Dec 27-Jan 1 and highs of 20s to 50s over the northern US, national demand will drop to light levels. How long this warmer than normal pattern extends into January will be of great interest, since the longer it holds, the more likely it’s going to disappoint.

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  • December 19, 2022

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