America's 'Spring Freezing' Has Been Sending Natural Gas Prices On A Tear

But cold temperatures should be warming the hearts of natural gas producers and investors.

In a note today, UBS analyst Dominic Schneider says March heating demand could now increase 30 percent year-over-year.

"Natural gas prices could bounce above the mark of $4 in the coming days," he says.

"Higher-than-normal nuclear power outages for this time of year have also been supportive," said Deutsche Bank's Xiao Fu. "Weather forecasts are calling for below-normal temperatures to persist in the six-to-10 day outlook across the eastern half of the US implying heating demand will remain elevated."

However, Schneider argues this is not likely to last for too long because of an expected recovery in nuclear power generation output and increased natural-gas-to coal switching.

Prices could fall to as low as $3.20 in Q2 2013, he Schneider.

Here's a look at how natgas prices have been trading: