Leonard: Power prices depend on what happens to the grid

Summary

Dan Leonard, Director of Forecasting at MetDesk, discusses the major winter storm and Arctic cold outbreak, explaining that natural gas prices are being driven more by the cold air behind the storm than by the snow itself. He says grid risks appear manageable relative to 2021 Storm Uri, though icing in Eastern Texas or the Lower Carolinas could affect power prices. He also flags home improvement stores as typical severe-weather beneficiaries and notes a potential second big storm for the Upper I-95 corridor next week.

• Major winter storm and follow-up Arctic cold are driving natural gas price moves.
• Snow and ice lay a foundation that lets cold persist, increasing heating demand.
• Natural gas pulled back on trader talk of a warmer February.
• Grid risks are less severe than 2021 Storm Uri; ERCOT has made changes.
• Icing in Eastern Texas or Lower Carolinas could affect power prices.
• Home improvement stores tend to benefit after severe weather disasters.
• Weather models show another potentially bigger storm for Upper I-95 next week.
• Heating oil is not materially impacted by winter storms; it tracks crude oil.