Here in Houston, we’re expecting a low of 25ºF (about 4º C) with a chance of snow Jan. 7. And that will be downright balmy compared to other parts of North America.

(Nairobi, on the other hand, is looking at a comfy 84ºF or 29ºC.)

But many places in the Northern Hemisphere, and particularly in North America, are in the midst of a cold snap as the new year begins. And energy pundits couldn’t be happier. After all, transportation fuel is not the only demand driver in this industry. Weather has a huge effect on the price of crude oil and natural gas. And we’re already seeing signs of higher prices to come.

Bill Herbert, in his Simmons Morning Energy Note, has posted a lengthy discussion about North American gas-related drilling activity. “Our repeated refrain of four prominent unknowns with respect to [North American] natural gas-related drilling activity – how soon, how sharp, how high, and how long – are being partly addressed by weather,” Herbert writes. “… how soon/sharp was partly if not largely contingent on felicitous weather as an early, cold weather was likely to yield a very brisk beginning to ’10.”

Already indications are positive. The US Q4 horizontal rig count was up 20-25% quarter to quarter. “An epic cold wave coupled with well-hedged E&Ps and replenished balance sheets will likely result in US drilling activity in ’10 being markedly better behaved,” he writes.

He expects fourth-quarter conference calls to be “buoyant,” especially for pressure pumping companies and land drillers.

With IOCs entering the shale picture (ExxonMobil and Total being the latest, but probably not the last, entries,) Herbert writes that the forecast for 2011 becomes much hazier due to production increases likely in 2010. This means that the “how high and how long” unknowns remain prominent.

Overall, he expects North American activity to be the focus this year, with a shift back to deepwater and international plays in 2011.

Meanwhile, crude prices are also enjoying a resurgence due to chilly weather. The Associated Press reported that crude is up 14% since mid-December, and they closed higher Jan. 5 than any day in 2009.

While part of this is economics, the article gives much of the credit to the cold snap in the US, which has resulted in four deaths in Tennessee attributed to low temperatures. This weather has affected heating oil supplies in some parts of the country, which have constrained supplies due to lower demand and thus lower refinery output last year.

Will it last? Houston’s high this coming Sunday is forecast to be 49ºF (9.4ºC) under sunny skies. But for most parts of North America, winter is far from over.