Fern Ignites a Perfect Storm for Natural Gas Volatility
- Timothy Beggans
- Jan 24
- 1 min read
Winter Storm Fern is barreling into the South, threatening millions with a dangerous mix of ice, snow, and high winds. Power outages and travel disruptions are likely—but for energy markets, the bigger story may be the volatility ahead.
Natural gas is entering a high-risk week with multiple catalysts converging at once. Options expire Tuesday, futures expire Wednesday, and the EIA storage report on Thursday is widely expected to post a new all-time record withdrawal. Add in the usual Sunday night weather model runs, and conditions are ripe for sharp price swings.
Prompt-month gas and January cash prices will dominate headlines, but longer-term traders are increasingly looking beyond the noise. The Jan–April injection spread found support and appears set to widen further. Meanwhile, the April–October injection strip continues to hold above the key $3.600/MMBtu value area, signaling confidence in a strong injection cycle ahead—both in the U.S. and Europe.
Structural demand tailwinds remain firmly in place. Rapidly expanding data center power needs and new U.S. LNG export capacity continue to tighten the longer-term balance, even as short-term volatility whipsaws the front of the curve.
This backdrop could prove constructive for energy equities, particularly natural gas producers. The sector remains underappreciated relative to the S&P 500, but sustained volatility, improving fundamentals, and global demand growth may soon attract renewed interest from hedge funds and portfolio managers.
Sometimes, the storm itself is the signal.
Links: https://www.eia.gov/naturalgas/storage/ https://www.cmegroup.com/markets/energy/natural-gas.html
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