Read MoreMillions brace for snow storm ahead of Arctic blast
While forecasts can change quickly, the "polar vortex"-like weather is still expected to tear through the Midwest on the back of a major snowfall. Snowstorms across the upper Midwest are preceding a blast of cold air that is expected to reach the East Coast later this week. Storm warnings ranged from Montana to Michigan on Monday, with a half-foot of snow or more possible from the Dakotas to Minnesota.
The Weather Channel, in response to a question on the forecast said there are always differences between model runs, but the only places where the temperatures may not be as extreme are in the Upper Midwest—Minnesota, Wisconsin and Upper Michigan. But they note it wasn't a major difference between now and Sunday, and high temperatures in the eastern two-thirds of the country are still expected to be a solid 15-20 degrees below normal for at least the next week.
"Right now, the market is telling it needs cold temperatures to be sustained," for prices to remain high, said Gene McGillian, an analyst with Tradition Energy. McGillian said the forecast he received changed to show that the longer-term outlook is more moderate than was expected.
Energy traders pay for various forecasting services that provide intraday updates. "These noon forecasts can vary.... It's not every time that there's a big correction on a change. I think the market is responding to overbought conditions," said McGillian. "There is an anchor on the market in the record amount of natural gas we're seeing come out of the ground."
Natural gas has made a rapid run higher from its Oct. 27 settle of $3.561 a million Btus. Analysts don't expect a replay of last year, when spot natural gas prices jumped above $100 a million Btus, due to deep and prolonged cold snaps.
"I think it's likely we'll touch $5. The takeaway is we'll see more trading like this," said Kilduff.
Kilduff said it's more likely that natural gas will reach $5 later in the heating season. "Every month, there's a record level of production. Any warm-up to any extent will see prices rapidly come down. There were forecasts of three arctic blasts last month, and none of them materialized and that got us down to the $3.50s," he said.
Analysts say the price of natural gas may easily reach and rise above $5 per million Btus, but it may not stay there long because of the production surge.
"It certainly helps the prices this winter, but the main thing about the production surge we saw this summer was it helped replace storage that we pulled out last winter," said Jack Weixel, director of energy analysis at Bentek. "We finished the winter at 800 Bcf (billion cubic feet), 1,000 Bcf below the year prior. So what that did was the gas market was starting way behind when we rolled into summer so the increased production helped refill that gap."
Weixel said the injection this year surpasses the previous 2003 record for injection into storage.
"We're looking to finish injection season at about 3,600 Bcf, which means the U.S. injected 2,800 Bcf or 2.8 Tcf in the ground this winter, which is the most ever injected," he said. "The previous record was 2.3 bcf in the summer of 2003. This has been unheard of and it wouldn't have happened without the record production."
But even with the record production, the amount of gas in storage is still below the five-year average and last year's level. The year-end supply was an 11-year low.
According to the Energy Information Administration, the U.S. had 3,571 Bcf in storage as of Oct. 31, an increase of 91 Bcf from the previous week, but it is still below the 3,809 in storage a year ago and the five-year average to 3,832 Bcf.
Natural gas production in the Lower 48 averaged 69.9 billion cubic feet per day (Bcf/d) in October, a 10th monthly record in a row, according to BentekEnergy, a unit of Platt's. That is 7.9 percent more than the daily average last year.
Bentek said since Oct. 23, production has been above 70 Bcf/d and on Oct. 24, it reached a record high of 70.9 Bcf/d.
While production has increased, so has demand. Power generation is requiring more and more gas, as it is replacing coal even faster than expected as utilities move to reduce carbon emissions.
Barclays analysts say three gigawatts of coal-fired power generation has been retired in the Northeast alone.
"Additionally, coal stocks at power plants are low," they wrote. They noted "63 percent (of) plants have less than 60 days of burn left and 23 percent of those have less than 30 days of burn versus 42 percent and 13 percent a year prior respectively."
They also point out that two-thirds of coal travels by rail, and rail congestion has been a factor keeping stocks low, with weekly coal car loads near six-year lows.
Another factor that could affect gas prices is the swift drop in oil prices and associated natural gas could be affected if oil falls below $70, a level that could impact drilling. Weixel notes that "roughly 13 Bcf/d of associated gas volumes come out of the ground alongside oil. Should oil prices falter more, less oil-directed drilling will occur in 2015 and roughly 0.8 Bcf/d of gas could be at risk, most likely out of the Anadarko, Eagle Ford and DJ basins."
Weixel said prices in the Northeast should once more be the highest in the country because the region still lacks sufficient pipelines. But some buildout of pipeline and facilities should help other areas relying on gas from the Marcellus shale in Pennsylvania.
He also said customers will be more prepared for cold weather price shocks this year. "Anybody that had to pay that spot price after it ran up over $100 is probably pretty well hedged. You learn that lesson once," he said.
Kilduff said that after this week's cold weather, prices could fall again unless it stays unusually cold. "You'll see prices back down to $4 and reset for another squeeze higher," said Kilduff. After that, prices could hit $5. "I would put it more in terms of a December time frame. That's when the weather has the most impact, and it still could. I would put it more in terms of a December time frame. That's when the weather has the most impact, and it's still somewhat early in the season."