Super El Niño Points to Mild Winter, Softer Heating Demand

By James Calloway

A Pacific sea surface temperature anomaly that could exceed 3.5°C above normal — the strongest reading since modern monitoring began in the 1950s — is set to depress heating demand across the northern US, Europe and parts of Asia this winter, according to meteorologist James Block, speaking on a UBS energy-team call Tuesday.

The forecast lands at a difficult moment for energy consumers. European natural gas futures approached 90 euros per megawatt-hour this week, and the market is digesting a global refining squeeze alongside continued disruption to energy flows through the Strait of Hormuz. Heating oil supplies remain tight going into the season. Against that backdrop, Block expressed high confidence that warmer-than-normal conditions will hold across several major demand regions, including the northern US, Europe and parts of Asia — a pattern that would moderate heating demand where supply margins are thinnest.

What is a Super El Niño, and how strong is this one?

Block said the current event is unequivocally the strongest observed since sea surface temperature monitoring began in the 1950s. A Super El Niño is typically characterized by Pacific temperatures running more than 3°C above normal, and Block believes anomalies could surpass 3.5°C this season.

His timeline matters for traders. The event should peak in January, then weaken gradually, with conditions likely returning to normal by May 2027, per the forecast. Super El Niño winters generally run mild — but they can also generate what Block called "black swan" events, including severe snowstorms and ice storms. If such episodes occur, he sees late January through early February as the most likely window, with the events probably short-lived, lasting one to two weeks.

The bottom line for energy markets, in Block's assessment, is lower-than-average heating-related demand this winter.

Which regions warm up, and which do not?

The signal varies sharply by basin of demand:

• United States: Temperatures across the Northern Plains, Northeast and parts of Canada should average 1.5°C to 3°C above normal. The Southern Tier trends the other way — cooler than average. Texas in particular looks colder and wetter than normal, though the probability of an extreme freeze event remains lower than in a typical winter.
• Europe: The signal is weaker than in North America but still points mild. Southern and Central Europe should run roughly 0.5°C to 1.5°C above normal. Northern Europe sees a smaller effect, trending warmer than average overall.
• Asia: Confidence is highest for above-normal temperatures in India and Japan. China's forecast is less robust, because continental effects and local terrain dominate its weather patterns — a real issue for the gas market, since demand concentrates in northern China, where the warming signal appears weakest.

For portfolio and supply planners, the regional detail is the story: the aggregate demand relief may not arrive where it is needed most, particularly in northern China and northern Europe.

What about hurricanes, wind and water?

Block does not anticipate any additional storms affecting the Gulf of Mexico, and he highlighted an unusually quiet hurricane season to date — only one significant storm — with El Niño-driven vertical wind shear having suppressed Atlantic tropical cyclone development. No tropical development or storms have hit the US East Coast.

Wind conditions in the US should benefit from a more southerly storm track, producing stronger wind speeds in key wind-power generation regions. The European wind outlook is less certain. On precipitation, the southern US is expected to see a wetter, stormier pattern with higher rainfall and improved water availability, while Europe trends both warmer and drier than average.

Where does the risk still sit?

Above-average temperatures do not eliminate the risk of one or two cold blasts. Block warned of the potential for snowstorms and ice storms even inside a mild winter, and flagged one specific scenario: in the Mid-Atlantic and Northeast, a powerful nor'easter coinciding with an Arctic cold outbreak could blanket major cities with heavy snow. Any such event in the late-January-to-early-February window would test heating oil and gas inventories precisely when they have drawn down furthest.

The watch item is that window — a two-week burst of winter in an otherwise warm season, arriving into a market where European gas trades near 90 euros per megawatt-hour and Hormuz flows stay disrupted.