It is no secret that Mother Nature has not been very kind to natural gas bulls so far this season. Without even looking at a weather map, that is reflected very clearly in price action, with a significant decline in prompt month prices since the beginning of November.

Simply put, as bullish as the fundamental backdrop has been, the weather has been skewed even more solidly in the bearish direction, with above-normal temperatures dominating much of the nation from 11/1/20 to the present.

The current demand forecast for the next couple of weeks is not very exciting either, with nothing more than occasional variability mixing into the lower demand regime.

But are seeds of change being planted for the end of the month into the start of the new year? We are tracking tropical forcing (MJO-related) signals to see. Current forecasts take the MJO over into phase 6.

That still correlates with warmer weather over most key areas of the United States.

But if this wave/forcing can continue to propagate over toward phase 8, that becomes a different ball game, as that phase correlates to colder weather, all else being equal.

Should this occur, the timing would be close to the turn of the new year. Sure enough, the CFS model, which has been locked-in warm in its longer-term forecasts, has shifted considerably colder the last couple of days in its January outlook.

We always take these models with grains of salt, but the point is, it is seeing something much different over the last two days than it saw previously, likely tied into these uncertainties regarding the evolution of tropical forcing.

Given that weather forecast changes are the main driver of price action at this time of the year, it goes without saying that we are nearing a very crucial period which could lead to some wild price action. If the tropical forcing does shift, upside risks to prices grow significantly. Should this process fail, we would likely remain in a warm-dominated state, posing risks to the downside in the land of natural gas prices.