A notably more frigid weather outlook developed over the holiday weekend, helping to send natural gas futures sharply higher in early trading Tuesday. The March Nymex contract was trading at $1.949/MMBtu at around 8:40 a.m. ET, up 11.2 cents from last Friday’s settle.

Weather data trended colder over the weekend, and those cold trends were extended in Monday’s model runs, according to NatGasWeather. The overnight Global Forecast System continued to move in the colder direction, the forecaster said.

“Essentially, further bullish weather trends continue,” NatGasWeather said. “No changes to the timing of major weather features to impact the U.S. the next 15 days, just with the pattern Feb. 27-March 3 looking better/more bullish. This means a nice cold shot will sweep across the northern U.S. Wednesday through Friday, followed by a milder break Feb. 22-26 before cold returns across most U.S. regions Feb. 27-March 3.

“This is a much better pattern compared to the past few months as numerous cold shots finally cash in on a tighter supply/demand balance to reduce surpluses versus the five-year average,” the forecaster added. “As long as colder than normal conditions are maintained in the weather maps into early March, weather sentiment will be viewed as bullish, the first time in months. But this winter’s track record has been to give back tons of demand as colder days on the back end of the 15-day forecast roll forward, so this needs close watching.”

Looking at the supply picture, Genscape Inc.’s estimate of Lower 48 production has averaged 92.6 Bcf/d over the past week, down about 0.35 Bcf/d compared to the prior 30-day average. Gulf Coast region output is down about 0.36 Bcf/d versus the prior 30 days, while Northeast production is off 0.31 Bcf/d, according to the firm’s estimates.

Permian production is up 2.1 Bcf/d, while Texas is up 0.1 Bcf/d. Other regions are showing flat production compared to the prior 30-day average, Genscape said.

Another factor to consider for traders is the extreme extent of the net short position among speculators, as indicated by Commodity Futures Trading Commission data, according to INTL FCStone Financial Inc. Senior Vice President Tom Saal. This sets up the potential for short covering on any shift in the fundamentals, he said.

“Going back five or six years worth of data, you’re seeing this is the greatest net short they’ve been during that period of time,” Saal told NGI recently. “They have pressured prices lower significantly. Any kind of fundamental reaction to the bullish side would probably trigger some short covering by speculators.”

March crude oil futures were trading at $51.05/bbl, down $1, while March RBOB gasoline was off fractionally to $1.5768/gal.