As forecasts over the weekend teased a colder Lower 48 pattern during the first week of December, natural gas futures rallied in early trading Monday. The December Nymex contract was up 14.1 cents to $6.444/MMBtu at around 8:45 a.m. ET. January was up 16.5 cents to $6.881.

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Freeport LNG on Friday announced that it expects to have around 2 Bcf/d of production capacity back online by January, later than its previous target for a November restart following a June explosion at the Texas export terminal. 

The announcement appeared to be in line with market expectations and “helped settle the growing rumor mill that had exerted growing influence over Nymex natural gas,” EBW Analytics Group analyst Eli Rubin told clients Monday. 

Market focus can now shift to weather as “the leading short-term indicator for natural gas,” the analyst added, noting that forecast trends over the weekend point to a “burgeoning cold pattern” arriving during the first week of December.

Heading into this past weekend, weather models had been showing strong demand nationally through early this week before a shift to more moderate temperatures and lighter demand to close out the month of November, according to NatGasWeather.

Over the weekend, the American and European models trended warmer for Wednesday through Dec. 1, though both “tease a colder pattern attempting to return Dec. 2-4, but with more to prove,” the firm said.

“Due to ongoing cold temperatures over the northern and central U.S., wellhead freeze-offs have dropped U.S. production by 2 Bcf/d-plus to 98-99 Bcf/d,” NatGasWeather added. However, “this will improve mid-week as warmer temperatures spread over most of the U.S. in a rather messy but milder pattern as highs reach the 40s to 70s over most areas.

“Cold air is expected into the western half of the U.S. Nov. 28-Dec. 1,” but temperatures will remain “warm over most of the eastern half of the U.S. for light national demand.”

Market participants will also have to account for potential impacts from the looming expiration of the December contract in a holiday-shortened week of trading, according to EBW’s Rubin.

“December contract options expiry on Friday and final settlement on Monday, layered on top of thin market liquidity exacerbated by the holiday, inject additional short-term volatility risks,” Rubin said. 

Should forecasts increase weather-driven demand expectations for early December, “a breakout to the upside — notwithstanding soft seasonal fundamentals — is possible over the next seven to 10 days,” the analyst added.