Natural Gas Futures Traders Look Past Near-Term Freeze as Prices Plunge on Late January Warm-Up

Despite intense winter weather and market disruptions in the near term, natural gas futures were down sharply in early trading Tuesday as models increased confidence in a return to milder temperatures for the final third of January.

After rallying 21.6 cents on Friday, the February Nymex contract was down 33.6 cents to $2.977/MMBtu at around 8:43 a.m. ET.

Weather models over the weekend shifted warmer for early next week into late January, including a “massive” drop in projected heating demand from the American dataset, according to NatGasWeather.

“Natural gas prices are sharply lower as frigid cold the next six days gives way to a much warmer than normal pattern” for Jan. 22-30, NatGasWeather said. “We expect large daily moves to continue this week,” with traders...