Trading volumes on the Chicago Mercantile Exchange weather futures market, the first of its kind when it came into being in 1999, have more than quadrupled since last year at roughly $1.6 billion in trades, with watchers on the sidelines coming to view the market as a meteorological crystal ball.

"This market is an excellent way for players to hedge their weather risk, because it completely isolates the weather as a factor," said Felix Carabello, associate director of industrial commodities and head of weather futures at the CME.

"But the market also represents the aggregate viewpoint of all its participants and is therefore a good indicator of what people believe the weather will do," he added.

Weather impacts about a third of the nation's gross domestic profit, or $3 trillion of the U.S. economy, according to Rodney Weiher, chief economist for the National Oceanic and Atmospheric Administration.

The weather futures market allows companies to hedge their risk by giving them a alternate source of revenue when weather hurts their core business. A heating oil supplier, for example, can bet on warm weather in New York or Boston, thus countering a loss in demand if the warmth occurs.

Energy companies often have access to in-house or private weather forecasters, and a futures market gives them incentive to act on, and thereby reveal, such information in weather futures pricing.

A market that can serve the dual function of leveling out risk and providing increased transparency into an industry's weather expertise is a much-welcomed boon in a year that promises finicky weather patterns and volatility.

The U.S. National Weather Service, along with several private U.S. forecasters, said this winter's weather will be particularly hard to predict due to a lack of a strong El Nino or La Nina weather driver in the Pacific.

This lack of a clear weather outlook generally makes it more difficult for energy suppliers to anticipate the nation's demand for products like heating oil, natural gas, and electricity. "In a year like this you're bound to see interest in this market jump," said Agbeli Ameko, managing partner for Denver-based Enercast, which provides financial information to the natural gas industry.

The CME weather futures market, which logged over 18,000 contracts this year through November compared to 4,446 in the same period last year, did a good job of reflecting forecasts of abnormally warm weather in November, followed by a cold trend in December, Ameko said.

"The market knew about the cooling trend in November well in advance of a rise in natural gas prices," Ameko said.

While the CME would not name any of the companies that actively trade in weather futures, Carabello said they included a broad cross-section of energy companies, reinsurance companies, and even some hedge funds that see an opportunity in weather's volatility.