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La Nina Is Coming - Natural Gas Daily

Summary

El Nino is going away.

La Nina is almost a certainty.

Big boost for natural gas this winter.

El Nino Is Almost Gone

El Nino-Southern Oscillation, or just warmer than 0.5C + Pacific Ocean surface temperature, is seeing a rapid decline as of the last NOAA update.

Current model trajectory has La Nina taking hold by mid-summer, while previous reports indicated a time frame of around fall. The significance of an "earlier" La Nina is quite important to the natural gas market.

Historically speaking, La Nina creates a colder-than-expected winter. If we look at heating degree days over the 2015-16 winter, HDD was substantially lower than average.

Winter heating demand was nearly two standard deviations below the average, and this has a profound effect on the winter of 2016-17. As most market...


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