With updated weather models seen hinting at a possible shift away from the exceptionally mild temperatures that have dominated recent forecasts, natural gas futures rallied in early trading Wednesday. The January Nymex contract was up 15.8 cents to $3.866/MMBtu at around 8:50 a.m. ET.

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While not adding to demand expectations day/day, the latest forecast outlook early Wednesday teased the possibility of more cold finding its way into the Lower 48 in late December, according to Bespoke Weather Services.

“There are some bullish changes to take note of in the upper-level pattern as we move out toward and beyond Dec. 20,” as the American and European modeling each “pushed more ridging into Alaska, which would pose more of a threat for cold air intrusions into the western and central U.S. as we move toward the holidays,” Bespoke said. 

Still, forecasting lacked enough detail to discern whether a pattern change later this month “would simply take us from super warm to variable, or perhaps to something more,” the firm added. “For now, we would lean toward just some variability, nationally, with best cold chances central/west.”

NatGasWeather noted heating degree day gains from the modeling in the overnight runs, but this effectively reversed losses in the midday runs on Tuesday.

“No changes overall” as the models “forecast a much warmer than normal U.S. pattern for the coming 15 days in terms of national demand, driven by an unseasonably warm/strong upper ridge that’s expected to rule much of the southern and eastern U.S. with highs of 50s to 80s,” the firm said. 

Even a modest increase in weather-driven demand expectations could see prices climb from recent levels, according to Bespoke.

“We have seen supply/demand balances tighten up, and the market is telling us that it would not take much of a weather change to send us higher,” Bespoke said. “We are already 20 cents off the lows, despite not even adding any demand back yet. If we do confirm a late-month change, even if just to variable or near normal, we could push back up toward $4 rather easily.”

Meanwhile, there were other factors besides weather potentially contributing to the recent bounce in prices, according to the NatGasWeather.

“Are U.S. prices rallying the past couple sessions due to a technically oversold bounce or due to strength in global prices?” the firm said. “Either way, winter strip prices are a far cry from where they traded at a little more than a month ago.”

January crude oil futures were up 19 cents to $72.24/bbl at around 8:50 a.m. ET.