US winter weather
The U.S. Energy Information Administration estimates that US winter weather will be 15% warmer in 2015–2016 compared to last year. The weather is expected to be warmer due to the El-Nino weather pattern. It reported that the latest weather models expect the heating degree days to fall more in the coming weeks. Commodity Weather Group reported that warmer-than-normal weather is expected over the next two weeks.
Weather by regions
The weather in the Northeast, Midwest, and Southeast parts of the US is expected to be warmer than last winter. In contrast, the weather in the western part of the US is expected to much colder than the levels last year. It’s important to note that 50% of US households use natural gas for heating purposes. A mild winter will curb the heating needs and negatively impact natural gas prices. Read the last part of the series to learn more about updated natural gas prices. Read the next part of the series to learn more about the US natural gas rig count and production.
Long-term lower natural gas prices, due to record supplies, led to the fall in US households’ heating expenses. US households are expected to spend 17% less this winter compared to 2014. The mild weather will continue to put pressure on natural gas prices during the peak demand season.
Crude oil and natural gas producers like REX Energy (REXX), EXCO Resources (XCO), Concho Resources (CXO), and EP Energy (EPE) are negatively affected by the fall in natural gas prices. Combined, they account for 3.1% of the Spider Oil and Gas ETF (XOP).