Frozen Markets, Burning Prices
Gas doubles, gold hits $5k, and you.
Your heating bill just jumped. Your electric company is sweating. And in a 2,000 mile radius across America, markets are pricing in scarcity.
Winter Storm Fern hit this past weekend, and it revealed something most readers have missed: energy markets are tightening, despite looking oversupplied on paper.
Here is what is actually happening, why it matters, and what you should do about it this week.
Energy Markets: The Big Pinch
Natural gas prices hit $6.20 per million BTUs on Monday, the highest since late 2022. That is a 106% surge from where they started the week. It sounds extreme until you realize this is the largest weekly gas move since 1990.
The mechanics are simple but brutal. When temperatures plunge to minus-50 across 37 states, two things happen simultaneously:
Production Freezes: Wellheads ice over in Texas, Louisiana, and Appalachia. A 4 billion cubic foot per day supply drop just vanished.
Demand Spikes: People burn gas to stay alive. Power plants burn gas to keep the grid alive.
The Department of Energy ordered emergency protocols for the first time in years. Over 800,000 customers lost power. But here is the critical part: prices were this volatile because storage is already lean after a rough 2025. The system had no buffer.
The Oil Paradox
While gas screams, oil whispers. Brent crude is hanging around $65 per barrel.
The International Energy Agency just warned that the global oil market is about to be oversupplied by 4.25 million barrels per day. Storm Fern disrupts US production this week, but global supply exceeds global demand by 4 percent structurally.
Think of it like this: the ship is sinking slowly, but someone just threw a life raft on deck. It’s a nice moment, but it doesn’t change the trajectory.
Precious Metals: The Fear Trade
Gold broke $5,000 per ounce for the first time on Monday. Silver broke $100.
These aren’t just numbers. They are psychological thresholds that release money when breached. The driver isn’t inflation, it’s geopolitical fear and the stop usage of the dollar.
Trump threatened tariffs on NATO allies.
Military threats toward Iran escalated.
Tariffs on Canada were floated.
Each escalation sends money to gold. Central banks in Russia, India, and Saudi Arabia are adding to reserves. Silver is drafting behind gold, gaining 147% in 2025 alone, driven by both monetary fear and industrial demand.
Copper: The Structural Shortage
Copper reached a record $6.11 per pound in early January. While it has pulled back slightly, the floor is rising.
Here is the signal most people miss: Copper deficits are structural, not cyclical.
JP Morgan forecasts a 330,000-ton global deficit in 2026. Why? Electrification. Every EV needs twice the copper of a gas car. Every AI data center climbing out of the ground needs copper.
The issue isn’t demand, it is that supply cannot keep pace.
If Chinese demand stays weak, copper tests $10,000 per ton. If China bounces? We might see $12,500.
What to Watch This Week
Friday (Storm Fern): Natural gas prices should stabilize downward. If Henry Hub spot prices stay above $4/MMBtu even post-storm, inventory issues are deeper than the weather story.Feb 1 (Tariffs): Trump’s tariff deadline hits. Negotiations this week will tell you if this is theater or policy. Gold will react immediately to headlines.The China Data: Manufacturing PMI releases this week. Contraction = Copper tests lows. Recovery = Copper rallies toward $6+.OPEC: If the cartel announces cuts, oil stabilizes. If they maintain production, prices drift toward $55.
What You Can Do Right Now
Hedge electricity volatility: If you run a business with high load, lock in Q1 power prices before the next system hits.
Check commodity exposure: You likely don’t own copper, but you own companies that do. If you are underweight materials, this week offers entry points.
Ignore Oil Headlines: The oversupply story is boring but real. Oil is range-bound $55-70 until OPEC cuts or the Middle East breaks.
Add Precious Metals: If you hedge currency risk, follow the central banks. Gold and silver are acting as dollar insurance but be careful with FOMO, wait for a pullback.
Why Share This?
Markets are moving fast. Energy prices just re-rated because of a three-day storm. Precious metals broke decade-long records because of political noise.
This is the work Flux Kinetics does every week: connecting dots between Energy & Commodity markets with your portfolio.
If you know people in energy, finance, or risk management, send them this article. Markets like these separate people who stay informed from people who react too late.
Flux Kinetics - Where energy meets intelligence,
Wassim C.
This content is for educational purposes only and does not constitute financial, legal, or tax advice. All opinions and analyses are my own, and any actions you take are at your own risk after consulting an appropriate professional.