Natural gas surges ahead of winter storm: Here's what you need to know

Summary

CNBC's Pippa Stevens discusses a record-setting surge in natural gas as a major U.S. winter storm approaches. She says the rally is driven by short covering, expected supply freeze-offs, strong demand, and a large storage draw, with attention on the storm's path and contract roll. Regional Northeast gas at Algonquin City Gates has spiked far above Henry Hub, while power markets and utilities like Duke Energy are monitoring potential storm impacts.

• Natural gas is on track for its best week on record and could extend depending on the storm path.
• Freeze-offs could cut supply by up to 80 Bcf and the weekly storage draw may be second-largest on record.
• Short covering from 14-month-high bearish positioning has amplified the rally.
• The front-month/second-month spread at $1.60 and contract roll may add volatility.
• Northeast regional gas at Algonquin City Gates trades near $25 per MMBtu.
• ERCOT issued a weather watch but expects normal grid conditions; Duke Energy warns of possible outages.
• Storage remains above the long-term average, limiting expectations for a lasting fundamental change.