Natural gas futures spiked on forecasts of another arctic air blast descending on North America and unseasonably cold temperatures in March.
March futures soared to settle about 11 percent higher, at $6.149 per million BTUs—a five-year high. Natural gas is up nearly 44 percent since Jan. 1, after unusually cold weather sparked record demand and forced a massive draw-down in storage.
"Are we going to $15 again? No; $6 yes, to $7, yes—but at that point, fracking will take off," said Dennis Gartman, publisher of The Gartman Letter. Natural gas prices have been moderate and hit a low in the $1.90 range in 2012, as U.S. production rose.
Hydraulic fracturing, or fracking, has enabled the drilling of previously unattainable gas and has led to forecasts of 100 years worth of supplies in the ground in the U.S.
On Wednesday, weather service WSI said that another "polar vortex" could be heading to the U.S. later this week and into next week. Arctic air is expected to descend Friday and make its way across the northern Plains and Upper Midwest before spreading south and east.
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The European Centre for Medium-Range Weather Forecasts shows that temperatures will be colder than originally thought into the second week of March.
As late as Tuesday, those models had shown temperatures moderating, but latest forecasts are forcing meteorologists to revise their predictions.
WSI, which advises Wall Street clients trading weather-sensitive stocks and commodities, is now calling for colder weather deeper into next month.
WSI Senior Meteorologist Dan Leonard told CNBC that "our outlook had already been hedging in the colder direction anyway, but the overnight trends boosted forecast confidence this morning."
The service expects daytime temperatures in cities including Chicago, Minneapolis and Des Moines, Iowa, to be in the teens and 20s, and possibly the single digits. Overnight temperatures are expected in the single digits, with subzero temperatures likely.
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The March natural gas contract expires next week, and traders expect the April contract, now below $5 per million BTU, to push higher as well.
"The March to April spread today has jumped out to $1.13," said Gene McGillian, analyst with Tradition Energy.
The Energy Information Administration releases natural gas inventory data at 10:30 a.m. ET Thursday.
"The withdrawals are eye-popping," said John Kilduff of Again Capital. "They've been dramatic every week. I'm looking for another 250 billion cubic feet."
The 1.6 trillion cubic feet in storage could be reduced to less than 1 trillion cubic feet by the end of the heating season at the end of March, he said. "One trillion cubic feet is low; that is very supportive for the market. Our storage level is already what we ended the season with last year."