Energy News: A Second Powerful Polar Vortex May Impact the United States Later This Month
Energy News Update: March 3rd, 2025 A Second Powerful Polar Vortex May Impact the United States Later This Month https://youtu.be/wWLV4Ci5WaI
Energy News Update: March 3rd, 2025 A Second Powerful Polar Vortex May Impact the United States Later This Month https://youtu.be/wWLV4Ci5WaI
Energy News Update: March 3rd, 2025
In our Feb 19th Energy Update we said the continued tightening of supplies is the primary reason the EIA’s latest Short-Term Energy Outlook (STEO) on Feb 11th estimated the average price of Natural Gas would increase from $2.20 per MMBtu in 2024 to $3.80 per MMBtu in 2025, an increase of 73% and an additional 11% in 2026 with the price averaging $4.20, and we recommended anyone with agreements expiring within the next 18 months take advantage of short-term declines to reserve Natural Gas and Electricity to be available when their present agreements expire.
As you can see from the chart below last week Natural Gas declined after the February Polar Vortex dissipated and mild weather moved into the United States:
But last week’s pullback may be short since Severe Weather Europe is an online resource that is forecasting a “final Polar Vortex collapse event is forecast for mid-March. With a very strong stratospheric warming event expected to develop, we currently see a rapid breakdown of the Polar Vortex. The event is still several days ahead, with impacts following further behind, but we do already see first hints of impacts across the United States and Canada.
This would be the second disruption of the Polar Vortex in 2025. The first occurred around mid-February and coincided with a strong cold air release across much of the central and eastern United States. This upcoming event in the stratosphere looks stronger than the first one and is forecast to be the final collapse of the Polar Vortex for this season”.
Forecasts beyond 2 weeks are not always accurate but if this forecast is correct prices will likely move sharply higher from present levels and since even if they are not correct, we believe the average price for Natural Gas and Electricity will be higher over the next 2 years, risk-adverse clients may consider taking advantage of last week’s decline and reserving electricity to be available when their present agreements expire.
Not every client’s risk tolerance and hedging strategy are the same, the goal of our reports is to reveal your risk/reward opportunities. We invite you to call one of our energy analysts to help plan a hedging strategy appropriate for your situation.
Ray Franklin
Energy Professionals
Senior Commodity Analyst
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