Americas Gas: Will a strong El Nino dampen gas equities this winter?

Research evidence excerpt

Americas Gas: Will a strong El Nino dampen gas equities this winter?

27 July 2026

Americas Energy & Transition

Americas Gas: Will a strong El Nino dampen gas equities this

winter?

One form of the current bear argument against natural gas we hear is that a severe El Nino Bob Brackett, Ph.D.

+1 917 344 8422 this winter will weaken gas demand. In this note we disagree with that argument.

bob.brackett@bernsteinsg.com

We note that the determination of El Nino and La Nina arises from watching sea surface

Minnie Xu temperature in the Pacific. That temperature is currently at a record for July (Exhibit 1).

+1 917 344 8574

minnie.xu@bernsteinsg.com

NOAA monitors those temperatures and derives probabilities of El Nino. Those odds are

100% certainty at least until March (Exhibit 3). Forecasts suggest a “very strong” El Nino is Raphael Lee

+1 917 344 8355 most likely (with temperatures >2 deg C above normal baseline) (Exhibit 4). Specifically a

raphael.lee@bernsteinsg.com plateau of around 2 to 2.5 deg C is expected (with a 3-month average of perhaps 2.2 deg)

(Exhibit 5).

A >2 degree forecast is rare but not unprecedented (Exhibit 6).

Anecdotally, El Nino is associated with warmer temperatures in winter at higher latitudes of

the US (Exhibit 7) and we note that NOAA’s weather outlook incorporates this strong El Nino

and expects “leaning above” to “likely above” average temperatures for the northern half of

the continental US this winter (Exhibit 8).

Temperature drives heating degree days (HDD) and cooling degree days (CDD). HDDs drive

winter gas demand (Exhibit 12).

We see no correlation between El Nino (RONI) and HDDs for the overall US when focused

on winter averages (Exhibit 14). Anecdotally it is believed higher latitudes are more