The Weather Battleground: How contrasting climatic forces are causing incredible natural gas price volatility

The Weather Battleground: How contrasting climatic forces are causing incredible natural gas price volatility

This video by Jim Roemer (AKA Dr. Weather) addresses:

A) Why forecasts for warmer weather deeper in February helped pressure natural gas and the ETF (BOIL) some 50% since the polar vortex and bull market, two weeks ago.

B) Why parts of the northern U.S., including the Northeast, will have off and on bouts of colder weather, vs warm weather over the Midwest and deep south

C) What is the significance of the Madden–Julian oscillation (MJO) in phase 4/5 and the negative GLAAM (Global Atmospheric Angular Momentum) and why these are usually warm, bearish signals for natural gas.

D) A very strong -WPO-/-NAO signal: Why typically this would result in major cold U.S. weather and a bull move in natural gas prices.

E) When having all of these different climatic forces (teleconnections), why using option strangles selling way out of the money call and put options in natural gas, will help capture price volatility

More big time cold weather in February and how weather is affecting global commodities

More big time cold weather in February and how weather is affecting global commodities

See this video by Jim Roemer.

He discusses:

The squeeze in natural gas prices and more big-time cold and snowstorms coming in February

Why we were bearish on coffee futures since $4

We got clients out of long silver around $100 an ounce a few weeks ago

Wheat prices may be bottoming

A look at global crop weather from cocoa to sugar

What is negative global angular momentum & how did it thwart the bull market in natural gas?

What is negative global angular momentum & how did it thwart the bull market in natural gas?

Following some free reports about weather and commodities here on Substack

GLAAM stands for Global Atmospheric Angular Momentum in weather forecasting. It is sometimes referred to as GAM and/or GLAM, but they all refer to the same phenomenon. It measures the atmosphere’s rotation, combining Earth’s spin and wind patterns, acting as a crucial index for global circulation and Earth’s rotation, used to understand large-scale climate patterns like ENSO and predict seasonal changes, linking atmospheric shifts to length-of-day variations via numerical models. 

There are both positive and negative angular momentum phenomena, and it is the negative GLAAM that is responsible for the mid-late December warm up over most of the United States and (as of this writing) the massive 20% sell-off in natural gas in just a few days.

Key Concepts

  • What it is: A measure of the total rotational momentum of the atmosphere around Earth’s axis, calculated by integrating wind speeds and densities across the globe.
  • Components: It includes the momentum from Earth’s own rotation (mass term) and the momentum from atmospheric winds (wind term), which vary seasonally.
  • Why it Matters:
    • Earth’s Rotation: Fluctuations in GLAAM directly affect the Earth’s rotation speed and thus the length of the day (LOD).
    • Climate Prediction: Strong correlations exist between GLAAM variations and climate phenomena like El Niño-Southern Oscillation (ENSO) and the Madden-Julian Oscillation (MJO).
    • Atmospheric Dynamics: It helps study how mountains, surface friction, and jet streams influence global weather patterns. 

How it is used in forecasting:

  • Monitoring: Atmospheric angular momentum is monitored in real-time using data from numerical weather models (like NASA’s GEOS models).
  • Seasonal Forecasts: Negative GLAAM often signals conditions favoring La Niña, potentially leading to cooler, snowier winters in certain regions, while positive GLAAM links to El Niño patterns.
  • Predictability: Studies suggest long-range forecasts of GLAAM (up to a year) are possible, offering insights into future climate. 

In essence, GLAAM provides a unified view of atmospheric dynamics, linking winds to Earth’s rotation and helping forecast broader climate trends. 

Negative  global atmospheric angular momentum (GLAAM) is associated with La Niña conditions and can contribute to warmer winter weather in parts of the U.S. by altering global circulation patterns, particularly the jet stream.

During a negative GLAAM phase, the atmosphere moves more slowly relative to the Earth’s surface. Thinks of it like the skater to the right.

This change is consistent with and helps maintain La Niña conditions. During La Niña, the trade winds blowing east-to-west across the tropical Pacific are stronger than usual. These strong trade winds push warm surface water toward Asia, allowing colder, nutrient-rich water to upwell along the American west coast. This process is a key feature of La Niña, and the associated atmospheric circulation changes are reflected in the negative GLAAM.

Will the Polar Vortex come south again by January? Will GLAAM go in the opposite direction and become positive? If so, natural gas prices would rally again, as we approach January.

That is what we do at WeatherWealth: We “out forecast” standard weather models and making trade recommendations for clients in soft, grain and natural gas commodities on six continents.