The U.S. winter will be colder than normal, with the north- central and Southeastern states seeing the “strongest chill,” MDA Weather Services in Gaithersburg, Maryland, said in a report to clients yesterday. The number of gas-weighted heating degree days, a measure of weather-driven fuel demand, will fall short of the previous winter, MDA said.

Temperatures across most of the lower 48 states will be above normal over the next 10 days before returning to seasonal norms across the East Coast and Midwest on Nov. 2 through Nov.6, according to Commodity Weather Group LLC in Bethesda, Maryland.

The low in Chicago on Oct. 30 will be 45 degrees Fahrenheit (7 Celsius), 4 above normal, before dropping a week later to 27, 12 below average, AccuWeather Inc. said on its website. About 49 percent of U.S. households use gas for heating.

Eoin Treacy's view

The natural gas price briefly surged earlier this year in response to the polar vortex that drove outsized demand for natural gas. Once the weather eased prices dropped back and have been drifting lower since. The injection rate for natural gas stockpiles has been aggressive this summer and according to Allen Brooks is back to the highs seen in 2003. Against that background a cold winter represents a potentially bullish argument for prices, but in its absence the benefit of the doubt can be given to continued lower to lateral ranging. 

On a relative basis crude oil continues to unwind its outperformance compared to natural gas. However it is questionable whether the ratio will return to the base that prevailed before the build out of shale gas supply from 2008.