Before we address this coming winter, here are a few highlights of natural gas market events thus far this year:
Regarding this winter - in the end, the principal driver in the natural gas market each winter is weather. Most weather experts are pointing to the strong El Nino conditions that currently exist, which often leads to a milder winter. The strongest El Nino in recent history was in 1996/97 and many are predicting a stronger El Nino presence this winter. Many current forecasts point towards normal to warmer-than-normal conditions for the northern portion of the country. Forecasts are cooler for the south and southeast. El Nino could also provide some needed higher-than-normal precipitation on the southern West Coast and in the Southwest. Given the ample production and gas storage, the country looks to be in pretty good shape heading into winter. Given these factors, one would conclude that gas price volatility will be non-existent this winter; however, a good risk management strategy should always be in place to put guardrails on the roadway.