Bloomberg article is here. A very good article.

Excerpts:

"Hedge Funds Almost Double Bullish Gas Bets on Cold Snap: Energy Markets

Hedge funds almost doubled bets ongains in natural gas as futures climbed to the highest level since August on forecasts for colder-than-normal weather.

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Natural gas climbed for seven straight days through Jan. 4,the longest advance since March 2008, as weather forecasterspredicted a cold snap across the U.S.

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“Will the cold persist through the balance of the season? If it does, the floor has risen for natural gas,” said Teri Viswanath, director of commodities research at Credit SuisseSecurities USA in Houston.

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“Two really large gas-storage withdrawal weeks are at handas heating needs surge,” Salmon said.

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Conflicting Models

While some weather models signal a warmer-than-averageFebruary due to the effect of La Nina, others indicate the emergence of “blocking patterns” that will keep cold air in the U.S.

La Nina, characterized by a cooling of temperatures in thetropical Pacific Ocean, occurs on average every three to five years and can last nine to 12 months, according to the U.S.National Oceanic and Atmospheric Administration. The event is associated with warmer-than-normal winters in parts of the U.S.

If the blocking patterns hold, higher heating demand will combine with falling production to erode stockpiles, driving prices higher, Viswanath said.