Leonard: Power prices depend on what happens to the grid

• A major winter storm and follow-up arctic cold are driving a significant surge in natural gas prices, with a 51% increase since Monday.
• Grid risks, particularly in Texas, are considered manageable due to less freezing rain and improvements made by ERCOT since Storm Yuri in 2021.
• Natural gas traders are primarily concerned with the sustained cold air behind the storm, which prevents warming, rather than the storm itself.
• A potential second arctic shot is forecasted for the following weekend, which could further impact energy demand and prices.
• Beyond natural gas, power prices are directly affected by grid stability, while home improvement stores (e.g., Home Depot, Lowe's) might see benefits from repair needs.

A major winter storm and subsequent arctic cold are significantly impacting natural gas prices, driving a weekly surge. While grid risks are deemed manageable compared to past events, the prolonged cold and potential for a second arctic blast remain key factors for energy markets. Traders are closely watching weather forecasts for continued demand signals.