Another Major Cold Snap on Tap for Early Next Week
The intensity of the upcoming cold is expected to eclipse last week's event.
Just as everyone catches their breath after last week’s major winter storm and intense cold, we need to be bracing for another, more intense, cold shot in the coming week. Forecasts for next Monday through Wednesday (Jan 20-21) show the coldest weather of the season so far on a population-weighted basis. The cold will impact nearly the entire continental U.S., with the Midwest and East especially at risk.
As opposed to last week’s cold that was more noteworthy for its duration than its peak intensity, the upcoming event looks to rival some of the major market disrupting winter weather that has been observed over the past five years. Heating degree days in the Midwest and East are forecast to peak at 58 and 43, respectively. This is on par with Winter Storm Uri during February 2021 in the Midwest, while still falling a bit shy of the December 2022 and January 2024 weather events. In the East, population-weighted degree days are forecast to eclipse all but the December 2022 event.
Thankfully, temperatures in the South Central, while below normal, aren’t expected to come close to the levels experienced in February 2021 that led to severe supply loss in Texas and the MidContinent.
Complicating the matter further is that Monday, January 20 is a federal holiday in observance of Martin Luther King Day, and the coldest days are expected to fall at the end of the holiday weekend. This Friday, physical natural gas will trade for the Saturday, January 18 through Tuesday, January 21 timeframe. This scenario has historically led to increased uncertainty and elevated premium in spot natural gas prices for the long weekend. End users in the eastern two-thirds of the U.S. need to be prepared to respond to spikes in cash pricing, utility curtailments, operational flow orders and other potential disruptions to business as usual.
If you have any concerns or questions about best practices in developing a plan specific to your organization, please contact Andy Huenefeld, managing partner at Pinebrook Energy Advisors, at 502.718.1582 or [email protected].