Transform weather uncertainty into quantifiable risk. Ilika 2-week probabilistic forecasts deliver the distribution of outcomes natural gas traders need to size positions, price hedges, and capture mispricing before the market reacts.
Natural gas futures are hypersensitive to temperature surprises. A colder-than-expected week can trigger massive storage draws and price spikes, while a mild spell can collapse forward curves. Traditional deterministic forecasts only give you one number—they miss the risk distribution that actually drives P&L.
Ilika ensemble-based forecasts provide the full distribution of Heating Degree Days (HDD) and temperature outcomes for the next 14 days. You see not just the mean, but the tails, the variance, and the probability of extreme events that move markets.
This is the sweet spot where weather forecasts still have predictive skill AND markets are highly sensitive to changes. It is exactly where probabilistic intelligence creates alpha.
A simple HDD forecast tells you one story. Ilika probabilistic view reveals the full picture.
Translating probabilistic HDD forecasts into actionable market intelligence
"I'm comfortable being long if P(HDD > normal + 30) ≥ 30%. If it drops below 15%, I cut exposure."
"What is my P&L at the 95th percentile HDD case? Show me tail risk scenarios."
"Is the market pricing in enough cold-tail risk? Compare implied vs. physical distribution."
The relationship between weather and natural gas prices is well-established in both academic research and market practice:
Market commentary regularly attributes price movements to weather forecasts:
Probabilistic intelligence that transforms weather uncertainty into quantifiable trading opportunities
See the probability of extreme heating demand scenarios (brutal cold snaps) that drive storage draws and price spikes. Understand not just the mean forecast, but the full distribution of outcomes—enabling precise position sizing based on quantified tail risk.
Two forecasts can have the same mean HDD but vastly different risk profiles. Ilika reveals when the distribution shifts from tight to bimodal—signaling hidden volatility and regime changes before they are priced into the market.
Define events that matter for your portfolio: "3+ days below -10°C in Permian (freeze-off risk)" or "5-day HDD total in ERCOT > threshold". Get real-time probabilities for the specific scenarios that drive your P&L.
For HDD swaps and options, the full distribution is essential—not just a mean. Ilika provides the forward HDD distribution conditioned on the latest ensembles, enabling accurate fair value calculations and risk-neutral pricing.
See how Ilika probabilistic weather intelligence can give you an edge in natural gas, power, and energy derivatives markets.
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