The NAO is an Index Value which, when negative, portends colder weather for the Lower 48 United States.
Blocking is a Natural Gas producer's best friend. In reference to North America, it is a weather feature where high pressure comes in over Greenland, enabling cold Arctic air to come down and sit in the Lower 48. The High over Greenland "blocks" the movement of the cold from leaving, resulting in days, weeks, or even many weeks of continuous cold weather.
 | North Atlantic Oscillation (NAO)
The U.S. National Weather Service publishes the NAO index. A current image can be found on their site. |
One of the best ways to predict blocking is with the North Atlantic Oscillation, or NAO. The NAO fluctuates between positive and negative readings (as measured by a comparison of heights and pressures of high latitudes on the North Atlantic compared to the mid North Atlantic Ocean). If the NAO is negative ("NAO-"), conditions are supportive of blocking.The current NAO is pictured here and
updated regularly by the US NOAA website. The black line is the historical NAO and the red lines are the forecasts for where the models predict the NAO will be. Forecasters last week were watching the NAO- setup for a possible block and colder temperatures in January. Unfortunately for Producers, at the current time the pattern/forecasts indicate blocking may occur further north, missing the United States. The gap lower on Monday December 28th indicates that forward demand from weather will be reduced.Questions or comments, please contact us at
research@aegis-hedging.com.
