Natural gas futures surged Monday, but gains had nothing to do with long-range weather outlooks.

Instead, tighter balances, a potential short squeeze and strong cash prices from a double-barreled winter storm moving across the United States likely combined to send the January Nymex gas futures contract soaring to an intraday high of $2.377 before going on to settle at $2.341, up 4.5 cents day/day. February climbed 4.4 cents to $2.326.

Spot gas prices were sharply higher as the blasts of cold were set to unleash snow and ice over the eastern half of the country in the coming days. Bookended by substantial increases on both coasts, the NGI Spot Gas National Avg. shot up 34.5 cents to $2.580.

Despite some extreme volatility in recent runs, weather models have generally painted a bearish weather outlook for the latter part of December, so Monday’s futures rally had market observers looking at other reasons for the sudden move higher in the futures curve.

“Clearly, weather patterns have nothing to do with gains” on Monday since a huge amount of demand was lost Friday that held through the weekend, “with even further milder trends in many datasets,” NatGasWeather said.

Instead, the firm offered several other supportive factors that could have aided in Monday’s surge.

One of those is a tighter supply/demand balance that is being aided by production that remains off highs. Near-record liquefied natural gas (LNG) exports and power burns that are stronger than last year are also supportive, while seasonal buying also could be fueling the momentum, the firm said. In addition, speculators are heavily short and likely led to a short squeeze as prices moved against them early in the session.

“But as far as U.S. weather patterns, they’re as bearish as they have looked in more than a month, and it will take either much colder trends or better prospects of cold returning at the end of December or the start of January if bearish weather headwinds are to cease,” NatGasWeather said.

Nevertheless, the blasts of frigid air moving across the nation this week led to a buying frenzy in the cash market on Monday, which may have spilled into futures trading.

The first storm raced through the Ohio Valley and into parts of the central Appalachians and Mid-Atlantic Sunday night and by Monday morning, a mix of snow, sleet, and freezing rain hovered over Maryland, Delaware and northern Virginia, with snow in parts of Pennsylvania and New Jersey, according to AccuWeather. Some light snow and sleet was to arrive from central New Jersey into the Tri-State area around New York City late Monday.

The second system was expected to be stronger, developing Monday in the lower Mississippi Valley and bringing more substantial snow over the region, the forecaster said. This system is forecast to then continue strengthening as it moves toward the Mid-Atlantic and Northeast into Tuesday.

“The stronger storm will be more effective at drawing milder air northward later Monday into Tuesday,” AccuWeather meteorologist Eric Leister said. “Places that see some wintry precipitation early Monday, like Baltimore and Philadelphia, will change to plain rain later Monday into Tuesday.”

Portions of the Northeast that will largely miss out on any snow from the first disturbance, may get blanketed with several inches of snow from the second, stronger storm, according to AccuWeather. This will primarily focus on northern Pennsylvania and much of upstate New York into New England.

“There is likely to be a narrow swath of six- to-12-inch snowfall totals in the Northeast as well, but confidence remains low on exactly where that stripe will occur,” AccuWeather senior meteorologist Rob Miller said.

By Tuesday night, the storm system is forecast to exit the New England coast, ushering in another reinforcing cold shot for the Great Lakes and Northeast, according to the forecaster. The lake-effect “snow machine” is expected to ramp up again, “adding even more to some of the snow totals downwind of the Great Lakes.”

The weather systems collectively should contribute to Lower 48 demand quickly returning above 100 Bcf/d this week, according to Genscape Inc. Based on the latest weather model runs, the firm’s Daily Supply & Demand model is projecting demand to reach 106 Bcf/d on Tuesday and then soar to an intraweek high of 113 Bcf/d later this week.

“Rounding out the demand side of the balance, we see exports to Mexico continue lurking right around the 5 Bcf/d mark, with potential to sink into the 4.7 Bcf/d range as the country historically shows a sharp seasonal dropoff that becomes particularly pronounced during the holidays,” Genscape senior natural gas analyst Rick Margolin said. “Offsetting that, though is the consistent levitation of LNG exports, with feed gas to U.S. terminals posting another 8.2 Bcf/d” on Monday.

Meanwhile, Commodities Futures Trading Commission data as of Dec. 10 continued to show the managed money short sector expanding positions by adding 18,559 contracts, while the managed money long sector gained 2,564 contracts.

“It seems that the speculative short trade continues to expect further declines, with the only hesitation coming from changes in weather forecasts,” Enverus analysts said.

The firm’s market internals developed a bearish bias with a gap decline on Dec. 9, down 18 cents to $2.158, and spent the remainder of the week regaining ground. “This action brought higher volume and slightly higher open interest, but ultimately failed to bring prices above the previous week’s close, leading to a continuation of the bearish bias.”

Without a significant change in the weather forecasts going into January, it may be hard to find the impetus for prices to force the massive short covering by the speculative trade, according to Enverus. Rallies up to $2.40 will find sellers, while declines may retest the lows of last week ($2.158) and, from there, move down to the $2.12 area.

“Potential exists for a break down to the August lows of $2.029 eventually, but that is unlikely with the January prompt contract,” the firm said.

With weather forecasters monitoring the series of winter storms that are set to wreak havoc on much of the eastern United States this week, cash prices in pipeline-constrained New England soared on Monday.

Algonquin Citygate spot gas shot up $2.265 to average $5.460, while other pricing hubs in the region posted similarly stout increases.

Gains were limited to around 30 cents in more interconnected markets. Transco Zone 6-NY jumped 32.5 cents to $2.625.

Ongoing pipeline work upstream on Texas Eastern Transmission resulted in hefty gains at Texas Eastern M-3, Delivery, where cash was up 43.0 cents to $2.665. Dominion South climbed 12.5 cents to $2.015.

Prices throughout the Southeast and Louisiana were up anywhere from 7 cents to 26 cents, while gains in the Midwest maxed out at 15 cents. Chicago Citygate next-day gas rose 10.5 cents to $2.255.

The rather small increases in the country’s midsection occurred even as the National Weather Service on Monday had declared a winter storm warning for much of eastern Kansas, stretching from across Missouri and into Illinois. Meanwhile, a severe thunderstorm outbreak triggered tornadoes across portions of the Deep South, ahead of the first cold front set to hit the United States this week.

Out West, weather patterns were eerily quiet to start the week, but forecasters warned that storms were set to return around midweek. A shift in the jet stream was expected to bring showers along the coast and as far inland as the Cascades from northern Washington to California on Wednesday.

“The jet stream will pull tropical moisture from near Hawaii into the Northwest, with the heaviest rain aimed at Oregon and possibly extreme Northern California,” AccuWeather senior meteorologist Brian Thompson said. He added that this atmospheric river will fuel abundant precipitation across the region.

A storm is forecast to move in beginning Wednesday night and into Thursday, spreading rain and mountain snow from west to east across Washington, Oregon and Northern California. Meanwhile, the moisture streaming in from the Pacific Ocean is expected to result in heavy rains in some areas.

“There is the potential for over 6 inches of rain along the southern Oregon coast from late Wednesday into the start of the weekend,” Thompson said.

The expected bump in demand resulting from the storms boosted spot gas prices across the region. Kern River in the Rockies jumped 65.5 cents to $3.175.

In California, SoCal Citygate next-day gas shot up 79.5 cents to $5.745.

Across the border, western Canada’s NOVA/AECO C posted a small gain of only 3.0 cents to C$2.315/gigajoule.

A number of factors continue to support AECO pricing. Winter-to-date production in western Canada is about 0.3 Bcf/d below year-ago levels, and withdrawals from system storage are running more than twice as strong as last winter-to-date’s rate, according to Genscape. In addition, provincial demand continues posting structural, weather-normalized increases, placing even greater pressure on flowing supply.

“This comes in the wake of the province entering the winter withdraw season with inventories starting at recent record lows,” Margolin said.