Listing their top-10 potential surprises for the year, the team tagged winter weather as number one on their list. "Even a market with surplus storage can fall to undersupply if weather is cold enough," the team of James Crandall, Biliana Pehlivanova and Michael Zenker said in a note to their clients.

"Mother Nature went long natural gas starting in December 2009, and is working her book," they said, saying they expect December pulls from storage to top 700 Bcf, 100 Bcf above the average since 2002, as the average temperature was 11% below the 10-year average.

"This factor is, in our view, the market's best chance for a bullish 2010 trajectory," Barclays said.

Two weeks ago, the Barclays team in a separate note said gas grabbing market share from coal was a big surprise in 2009. In 2010 the surprise may be that coal takes it back. "Coal recovers most, but not all of its lost 2009 market share, but the balance is delicately linked to gas prices," Barclays said.

"The surprise could come either from a booming recovery in coal-fired generation, sending gas demand into a tailspin, or from additional displacement of coal, which would require a combination of strong coal prices and weak natural gas prices."

Two more surprises Barclays believes are possible in 2010 are a growing gas supply, even in a $5/MMBtu market. The combination of more efficient shale wells recovering more gas with more fracks, will keep producers producing. "If gas prices are below cost, why drill?" they ask. "It depends on which "price" and "costs" one is talking about."

With hedging to guarantee cash flow and lots of land leased cheaply, producers will look at their future costs, rather than their all-in costs, and invest $3 to produce gas they sell at $5/MBtu, Barclays said, noting that they already believe the rig count will grow slowly in a $5/MMBtu price environment.

The amount of liquefied natural gas imported to the US is a perennial item on "what to watch for" lists. Barclays said the surge in overseas liquefaction plants coming on line and the possibility of more pipeline gas flowing in Europe could bring result in even more gas looking for a home on US shores.

"More than ever, cross-Atlantic price spreads will be important to watch, and should feature more prominently in Houston cocktail party conversation," Barclays said.

Another surprise that growing gas supplies could bring would be a flattening of the back end of the gas futures price curve as the market sees production growing at sub-$6/MMBtu prices, the bank said. "Perhaps the market would realize that producers do not require $7 or even $6 to grow production," they said. "Such a sequence of events could convince the market that the back of the curve is too pricey."

Other surprises that could be lurking in 2010 include breakthrough legislation favoring natural gas vehicles in the US, or, less likely, strong cap-and-trade rules raising coal prices. The Barclays team doesn't have high hopes that tough carbon laws are coming, but warn that the "Environmental Protection Agency is on a separate track. Thus, the scales would still tip against coal."

Less likely, but still in the mix are two more possible surprises for the natural gas industry: that gas demand doesn't come back in a US economic recovery that is "energy light" and that bankers and lenders throttle back the amount of capital they are willing to invest or lend to producers.

"A protracted period of disappointing prices, or the failure of a number of producers, would rein in the appetite of the capital markets to fund producers," Barclays said. "While intriguing, there are no signs of such a shift. In fact, the cost of borrowing has continued to fall since the credit crisis and the capital markets are open for producers."

--Bill Holland, bill_holland@platts.com